Global music startup Magroove shares the 21-page pitch deck it used to raise $1.6 million to help independent artists distribute releases and make more money
This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now.
- Music startup Magroove built a global distribution and discovery platform.
- The Brazil-based startup, led by founders Vítor Cunha and Fabrício Schiavo, raised $1.6 million in seed funding.
- Here is the 21-page pitch deck they used to get investors.
Music startup Magroove wants to give independent artists around the world better access to major streaming services.
The São Paulo, Brazil-based startup helps indie musicians distribute music on global platforms like Spotify and iTunes, and runs a music-discovery app. The company says it has 850,000 artists and users.
A prime selling point for artists on the platform is its affordable distribution services, which people can start using for free. Magroove then takes each year the first $5 of the earnings from the music an artist releases.
“I had my history as trying to make it as a musician, knowing absolutely nothing to now being in the position to help other artists and serve them with things that I didn’t have back then,” said cofounder Vítor Cunha, who was a music producer and engineer before Magroove.
The company has worked with international musicians since it launched in 2019, according to Cunha. “The majority of our clients weren’t from Brazil or from our region,” he said.
Its international footprint helped get the attention of investors.
Magroove, led by Cunha and his cofounder Fabrício Schiavo, recently raised $1.6 million funding in a seed round from Brazilian venture-capital firm DOMO Invest. Cunha said Magroove’s global audience, along with the scalability of its products, and its focus on independent music and creators, impressed the firm.
The platform had attracted musicians in the US and Europe — who make up 70% of its users — and the founders’ envisioned an offering that would be affordable and simple for artists to use anywhere in the world. They’re looking to help independent artists who haven’t accessed the mainstream music platforms or monetized their brands online.
“In my experience as a music engineer and music producer, I’ve identified that in other music markets across the globe, the independent artists there face the same issues that we did here in our market,” Cunha said.
Here is 21-slide pitch deck Magroove used to catch the attention of investors:
The deck opens with Magroove’s logo
The startup then begins to describe its target market
Magroove says it focuses on artists who aren’t able to make a living off of their music.
The slide suggests that’s most people in the music industry, with a chart showing 100,000 out of 20 million musicians make a living from music.
Its target market also includes artists who are not yet on mainstream streaming platforms
The slide features a chart that suggests 80% of musicians globally are independent artists that are not on major streaming platforms like Spotify and Apple Music.
It cites other data showing independent music is a large part of the global market
Magroove shows here why its focus on independent artists is important. It cites 2020 data that estimates the global music industry is a $21.6 billion market, and, based on 2018 data, independent music makes up close 40% of that.
Magroove outlines the problem it’s trying to solve in the music industry
The slide reads:
In order to appropriately monetize their music, artists need to deal with numerous fragmented tasks.
A lot of these tasks are completely outside the area of expertise of an aspiring musician.
Monetization tools are scattered and can be prohibitively costly for the indie musician.
Here’s a summary of what Magroove does
The slide reads:
Magroove is a one-stop shop offering every service an indie artist needs in order to make money from their music.
The company also sees an opportunity to work with micro influencers and other creators
This slide includes stats showing the share of micro influencers — including those with fewer than 100,000 YouTube subscribers or 100,000 Instagram followers — compared with the share of independent artists globally.
“Working directly on the creator-economy market was very interesting for DOMO and for any other venture-capital firms we would pitch,” Cunha said. “It’s a growing market.”
Magroove breaks down its user demographics around the world
Magroove shows off the Brazilian-based brand’s global reach.
“Every country is as important as the next one for us,” Cunha said. “It’s more social proof that the world has accepted Magroove and we really make a difference in places that we are not sure that other other players do.”
The slide lists these statistics:
- 90k users
- 98.3% international
- more than 70% in the US and Europe
- 195 countries
It lays out where its products can help musicians, from release to monetization
As a distribution platform, Magroove concentrates on the steps an artist is supposed to take after the music-production process. Here are the parts of the process it says it can help with:
- Building an audience
The company breaks down its approach to music distribution, its ‘flagship’ offering
Magroove’s main business is music distribution. Here’s how it describes its method:
- Distribution: Upload an album to major streaming services with only a few clicks.
- Moderation: Monitor the moderation and quality control process.
- Analytics: Access to statements and performance analysis.
- Payment: Request a payout with a few clicks and receive payment on a Paypal account.
It’s also testing a shopping product for artists
Magroove wants to help artists make more money with digital stores where they can sell merchandise, music downloads, and more.
This feature is still being tested, but the slide describes how artists could use it:
- Merch: Sell merchandising and receive donations and subscriptions.
- Products: Use our automatically created designs or upload your own.
- Fan Link: Share your available songs with links to most streaming services.
- Infrastructure: Payment processing, production, and worldwide shipping.
It’s trialing a website-builder that’s tailored for musicians
Cunha described Magroove’s website service as “Wix for musicians,” so artists don’t need experience building websites to us it. This service, like Magroove’s store offering, is still being tested.
Magroove’s website packages cost between $7.95 and $17.95 per month. On a yearly plan, packages range from $6.29 to $14.63 per month.
The slide’s description of the website offering reads:
- Customize: Edit your Magroove Store template to match your visual identity.
- Seamless Experience: Made for everyone. Not an ounce of coding or IT knowledge required.
- Go Solo: Choose and buy your own custom domain to host your website under.
- Premium Service: Subscription based.
Magroove also has a song-recommendation app
Another feature of Magroove’s platform is its music-discovery service, which is powered by its in-house artificial intelligence.
The service recommends new music, both from artists on and off of Magroove’s platform. Users can search for music they want to find similar matches to. It’s not a streaming service, so users can only hear snippets of the songs suggested to them.
The slide’s description reads:
- Artist to Listener: Recommendation platform for music lovers to find their new tunes.
- Opportunity: Our artists are recommended along with big names in the industry.
- Cutting edge technology: Our own AI, created in-house, coordinates the system.
- Fun: Quick and frequent interactions, with an intuitive and friendly UI.
Magroove says its services stand out against those from competitors
“Charging nothing is a huge differential for artists,” Cunha said, referring to the company’s free access to its distribution service. “Many times they’re starting their careers, and they don’t have much to spend.”
The slide reads:
Very low friction: Artists don’t have to pay to get started.
One-Stop Shop: Synergy between the different services.
Indie focused: A very large audience that is frequently overlooked.
A graph shows the company’s growth in artist users and monthly revenue through 2021
Magroove’s founders come from the music and tech industries
Cunha’s experience as a music producer and audio engineer is part of why he prioritizes accessibility in Magroove’s platform.
He also worked with his cofounder Schiavo, a mechatronics engineer who has a tech background, on the Magroove concept for a few years before launching the company in 2019.
They closed their first investment round in 2020.
The deck outlines the company’s plans through 2024
The three aspects of Magroove’s pitch that stood out most to investors were the company’s scalability, target market, and international focus, according to Cunha.
The deck ends with the company’s contact information
Correction: May 16, 2023 — An earlier version of this story misstated the number of artists on the platform. The company said it had 850,000 artists and users, not 850,000 artists.