K-Pop powerhouse SM Entertainment, through its venture capital arm SM Culture Partners, took part in the $8 million series A funding round of Modhaus, a South Korean startup at the intersection of blockchain technology and the K-Pop industry.
The investment, led by US venture capital firm Sfermion, aims to further Modhaus’ goal of integrating blockchain into various aspects of the Korean entertainment world, crypto media group The Block reported Monday (November 13), citing a company statement.
The funding round also saw participation from other investors, including Seoul-based Laguna Investment, Japan’s KDDI Open Innovation Fund III, and Singapore-based Foresight Ventures, which recently acquired The Block.
Established in December 2021, Modhaus is known for creating the K-pop girl group tripleS, which has amassed over 1.74 million subscribers on YouTube and nearly 820,000 monthly listeners on Spotify. Their track, Generation, has been streamed nearly 35 million times on Spotify.
The company’s latest financial injection comes as it plans to launch the world’s first K-pop artist made and operated by its fans, according to its website.
“By collecting NFT-format photocards of their favorite idol members, fans receive utility tokens that enable them to participate in decisions related to group operations, such as the activities of members, title songs, album jacket photo shoots, and selecting the city for these activities.”
Modhaus’ K-Pop approach lies in its non-fungible token (NFT) voting system. Through Modhaus’ COSMO app, fans can purchase NFT photocards, which they can use as voting tokens.
“By collecting NFT-format photocards of their favorite idol members, fans receive utility tokens that enable them to participate in decisions related to group operations, such as the activities of members, title songs, album jacket photo shoots, and selecting the city for these activities,” Modhaus was quoted by The Block as saying.
Jaden Jeong, CEO and co-founder of Modhaus, stressed the importance of fan involvement, saying K-pop fans often possess keen insights.
“With their sharp eyes for talent and trendspotting, we aim to enhance artist value through amplified fan involvement,” Jeong said.
The move aligns with broader industry trend as major Korean music labels explore the potential of blockchain technology and the metaverse. HYBE, which manages BTS and SEVENTEEN, launched its NFT platform Momentica in October 2022 in collaboration with Korean blockchain firm Dunamu.
“Just as media and streaming have transformed the music industry, it is anticipated that web3 will be the next game changer for the music industry.”
Simon Kim, Hashed
Last month, Momentica rolled out an NFT collection featuring videos and photos of SEVENTEEN when the group dropped their new album, Seventeenth Heaven.
Simon Kim, CEO and Managing Partner of Hashed, an investor and incubator of Modhaus, sees blockchain technology as the “next game changer” for the music industry.
“Just as media and streaming have transformed the music industry, it is anticipated that web3 will be the next game changer for the music industry,” Kim was quoted by The Block as saying.
GD Kim, COO of UNOPND, a venture division of Hashed, commended Modhaus for driving mass adoption of blockchain technology in the entertainment industry. Kim reportedly told The Block that nearly 130,000 fans have bought 1.2 million digital photo cards on COSMO since its launch.
“Modhaus has demonstrated a prime example of driving mass adoption of blockchain technology in the entertainment industry,” Kim said.
SM Entertainment’s investment in Modhaus comes as the K-Pop agency also seeks to capitalize on the adoption of blockchain in the music industry. In February 2022, SM expanded its metaverse ambitions to the blockchain and NFTs through a strategic partnership with cryptocurrency exchange Binance.
They had agreed to build a “comprehensive partnership” to establish, what they call, a global Play2Create (P2C) ecosystem.
Music Business Worldwide