Los Angeles-headquartered music distribution and payments platform Stem says it has secured a $250 million credit facility from Chicago-headquartered Victory Park Capital.
According to Stem, its partnership with VPC, a global alternative investment firm specializing in private credit, will allow it to expand its artist-advance product.
Along with advances for yet-to-be-released music, artists will also have the option to take advances against previously released albums and songs, “presenting a range of opportunities to support their growth”, Stem said on Tuesday (July 11).
Since its launch in 2020, Stem claims that its advance check product “has proven to be an instrumental resource for artists in various stages to develop their careers”.
For mature artists looking to leverage their catalogs financially, Stem claims that it “provides market rate, near-term liquidity with flexible repayment models”.
For artists “who are leaving the major label system and are unable to bring their existing work to a new partner”, Stem says that it provides advances against future projects without taking any ownership”.
For the past seven years, Stem has distributed music on behalf of artists such as Brent Faiyaz, Melii, Wiz Khalifa, and Juicy J, as well as record labels like Big Loud.
In 2019, Stem quit DIY distribution and raised its fees for new clients, while also bolstering its focus on ‘top performing artists.’
In April last year, Stem raised a $20 million new round of funding, led by QED Investors, a significant venture capitalist firm in the fintech space.
Stem cites numerous artists as having used its advance product.
Amongst them are Brooklyn-born artist Justine Skye. Stem claims that Skye used the company’s advances “to transition from her early career as a major label artist to an independent powerhouse”.
The company claims that within 12 months, Skye and her team have taken out five advances, with the most-recent loan taken being a 6x increase from the first in that period, and “all have served a distinct purpose for the advancement of her career”.
Also cited is independent artist, Brent Faiyaz and his team at Colture, who Stem claims “have found major success” using its advances to “properly invest in his rising stardom”. Stem says that Faiyaz has taken eight advances over the past three years, which its adds “helped fund the creation and release” of his latest album Wasteland, released in July 2022. The album debuted at No.2 on the Billboard 100.
Stem also cites Tampa-based band Set It Off as having “leveraged a six-figure advance” toward a SIRIUSXM Radio Campaign and TikTok marketing, “resulting in their single Punching Bag becoming the No.1 Most Added song on the Rock radio charts”.
“Stem has demonstrated itself to be a premiere destination for artists, whether emerging or established, to grow their careers.”
Milana Lewis, Stem
“Stem has demonstrated itself to be a premiere destination for artists, whether emerging or established, to grow their careers,” says Milana Lewis, CEO of Stem.
“This funding from VPC enables us to solve two major gaps we see artists consistently facing. The first gap is access to capital for those who are not quite yet ready to sell their catalog but want to leverage it for cash.
Added Lewis: “The second is investment in future music for those who are exiting the major label system, have their catalog currently committed, but have the opportunity to become independent for future releases. Solving both of these pain points in a way where the client can set their own terms is incredibly exciting.”
“Enabling access to capital is a major focal point for us, and we are excited to be partnering with Stem to help meet the financing needs of artists.”
Gordon Watson, Victory Park Capital
Gordon Watson, Partner at Victory Park Capital, added: “Enabling access to capital is a major focal point for us, and we are excited to be partnering with Stem to help meet the financing needs of artists.
“We share Milana and the rest of the Stem team’s commitment to flexibility for borrowers, and we look forward to supporting the continued growth and success of the advance product.” Music Business Worldwide
