Music Tech Accelerators
The music tech ecosystem is still quite small. Music startups have less choice of accelerators compared to a fintech or a foodtech one. There are less than 20 acceleration programs available in musictech worldwide and even fewer are solely and entirely dedicated to this vertical.
To reveal more opportunities for music startups, Stereotheque talked with Michael Rohde Böwadt, Business Accelerator & Investment Manager at Accelerace, Denmark. Michael is responsible for the unique Soundtech Accelerator Program for sound & music startups launched in collaboration with another Danish ecosystem player, Sound Hub.
Top Location for Music Startups: The City of Sound
The program started in 2018 in a Danish city, Struer, which is now famous as the City of Sound. Struer is a hometown for a number of leading music companies like Bang & Olufsen and Harman (currently owned by Samsung). The brand of the City of Sound was developed by Danish authorities in 2008 to promote Struer as the epicenter of the music industry and a business cluster for music companies.
The idea of a startup accelerator in sound & music came along as a natural step in the music ecosystem development. And, the program was born as a result of partnership of Accelerace, a seed accelerator from Copenhagen, and Sound Hub, sound coworking and meeting space from Struer.
International Spot on the Music Map
Since autumn 2018, 5 batches of 8 startups each has gone through the program. The next batch kicks-off in September 2020 (the call for applications is now open). Curiously, most of the startups-participants come from outside of Denmark. “70% of startups coming to Struer are international. Most are originally from Europe, but also from Israel, India, Lebanon, Chile, USA and even Australia – each time we have a new country on board ’ – says Michael.
“What surprises me in a good way is that we are getting around 30-50 applications for each batch. It’s quite a healthy pool of startups for our vertical. And I still think that the market of music accelerators is underserved”.
The Program: Is It Different for Music Startups?
“Startup development basics is more or less the same across all verticals. But when it comes to industry-specific part, it’s very hard to be relevant unless you have a very deep experience in the field”, – comments Michael. “Of course, we are leveraging the strong and world-recognized music heritage of Denmark. Our startups gain access to a lot of knowledge and people of the industry. I don’t think it would otherwise be possible to attract startups to come on-site from so many parts of the world”.
The program lasts 6 months. The first half of it focuses on the general startup acceleration: pitching, fundraising and so on. The second half is very specific and tailored to the needs of each startup and its product development. “For example, we do technical coaching on actual hardware or software design. We are proud to have industry-specific mentors helping the startups. For instance, the former Director of the Acoustic Center at Bang & Olufsen contributes his time to our program. In addition, we offer strong commercial support putting startups into our network of key companies in the music market”.
Music Startups: Who Are They?
Startups-participants represent a very broad scope of solutions related to sound and music: medical-related audio, noise, headphones, AI in music and audio, etc. One of the success stories from previous batches is AVATronics – the startup working on noise-canceling technology that attracted CHF 1.6 Million in 2020. Usually the startups entering Accelerace & Sound Hub program are very early stage, just before going to market.
“50% of startups are musicians turning entrepreneurs, other 50% are engineers entering audiotech industry because they like it. But even musicians usually have background in other industries, like finance. It’s very rare when we see pure musicians founding startups”- adds Michael.
Fundraising in Music Tech
For music startups with very technological products it’s hard to get investment from music-related VCs or angels. “Our feeling is for such startups it’s easier to get funding from outside the music industry. For example, earlier mentioned AVATronics got investment from a deep tech fund. We also see musicians turning angel investors but these are more “investments with heart” rather then technical investments”.
In the case of Accelerace & Sound Hub program, it is equity-free. The soundtech program is supported by the Danish government and private investors.
Music Startups During Covid Times
Michael highlights several changes and characteristics of music startup industry during Covid-19 crisis:
- It’s super tough to do music acceleration offline and get the same effect since the startups are working with audio equipment. That’s why Accelerace & Sound Hub have postponed the current call for applications till August 2020.
- It’s very hard for startups to get funding now. A lot of VC’s and angels are not willing to invest. Therefore, the best thing for music startups is to focus on R&D during this time. They should get ready to really push with their product as soon as the market stabilizes.
- Most musicians and artists are sitting at home during the lockdown. It means that’s a good moment to focus on establishing relations with artists: they have free time to look into your product!
For example, there is a German startup that produces devices for dancers – Instruments of Things. Those devices are motion sensors helping dancers to manipulate the sound while dancing. Instruments of Things’ team used lockdown time productively to get hand on their potential customers. They prepared for virtual exhibitions thoroughly while other competitors were still not paying much attention to online events. Instruments of Things also reached out to music influencers and managed to get their products reviewed online on popular YouTube channels.
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