Rapchat tunes into $2.3M as its music-making app hits 7M users

YouTube, Snapchat, Twitter, TikTok and Facebook’s Instagram have upended the film and TV industries, with a new wave of cinematographers, directors and actors leveraging innovations in technology to create new work and connect directly with billions of consumers to see it. Today, a startup is announcing some funding as it looks to make a similar impact in the world of music.

Rapchat, an app that lets people create music tracks — raps, as its names suggest, or something else — using a platform that crowdsources beats and lets people put vocals on top of them, has raised $2.3 million.

Co-led by Sony Music Entertainment and NYC VC firm Adjacent, this is an extension to Rapchat’s seed round of $1.7 million back in 2018, and CEO and co-founder Seth Miller tells me it’s coming as the startup is getting ready for a bigger Series A.

With no connection to Snapchat — not now at least, except that founders Seth Miller and Pat Gibson did think it was a funny pun at the time that they were first conceiving of the company as a side hustle while still in university in 2015 — Rapchat has already gone quite some way in scaling.

The company today has some 7 million registered users, and at the moment some 250,000 songs are being created around a catalog of about 100,000 beats by 500,000 active users on the platform each month. Engagement is hovering right now at 35 minutes per day on average, a mix not just of people making tunes, but through the beginnings of a social graph: people coming onto the app to discover and share those tracks.

Rapchat plans to use the funding to continue expanding the scope of what you can create on its platform, including growing the prize pools for Rapchat’s ‘Challenges’ competition series; expand to have more artists, producers, and industry executives on the platform for mentoring; and to extend that platform’s reach to integrate more deeply with the likes of TikTok, Snapchat, Spotify and Apple Music — platforms where creators are already making a lot of content, and where music is figuring strongly in that effort.

Rapchat’s growth not only speaks to how the startup has pulled off its ambition to make it easier to make music, but it also speaks to an appetite, an itch, in the creator economy: there is a big wide world of music-making out there, and more want to see if they can strike the right note.

Rapchat is definitely not the only, nor the first, company to think of how to address music creators within the bigger creator economy.

Another app called Voisey had conceived of a similar idea but focused primarily on letting people create and record shorter clips rather than full music tracks before sharing them to other platforms. It has not quite come a household name, but it did have some small success in bringing attention to new artists, and interestingly, it was quietly acquired by Snap last year (and for now Snap’s kept Voisey’s app up).

TikTok’s parent ByteDance has also made an acquisition of another music creation app, Jukedeck. As with Snap’s acquisition, so far we’re not fully clear on how and where that acquisition is going, but we’ve heard through the grapevine that TikTok is working on a new music service that sounds like it might let more content get plugged into TikTok’s music layer, so perhaps watch this space.

And in perhaps the most trend-endorsing act of all, Rapchat has been cloned — by Facebook, no less. NPE, the social networking behemoth’s in-house skunkworks team, in February rolled out BARS (all caps! stand out!) — which is, yes — an app on which you can create your own rap music.

Miller, at least for now, is about as laid back as you could be, considering all of the above, confident that at least for now, he is very happy with the engagement Rapchat is seeing, including around tests it has been running around offering new premium features — the app is free to use right now, but it has plans to offer creators more production tools and better ways of sharing their work and helping build a business out of it. Key to that will be never demanding licensing fees on music: creators keep the royalties, with Rapchat’s value lying in helping them make and track how that music gets used with the metadata that it holds on those tracks.

Some of the low-key approach might well come from the fact that Rapchat and its founders are somewhat outside of the startup fray. The idea for the app first came up in 2013, Miller said, when he and Gibson were students at Ohio University in Columbus.

“We were coming of age when everyone in college was using apps like Snapchat and Instagram,” he said. “We loved them for video, but saw there was nothing like them for creating music. So we pitched the idea during a Startup Weekend competition: snapping like Snapchat but for rap. Someone said, ‘Rapchat’ and we liked it.”

They went full-time on the idea in 2015 when they got into 500 Startups with the app, but even so it’s taken them years to build up the business, get attention from investors and raise money. Why? Partly because music is hard, and frankly the main game in town for years has been streaming services, rather than creation services.

Miller and Gibson persisted: “I knew that this market was huge. It just made so much sense to me,” he said. “The advent of the mobile devices the moment that apps like Instagram, VSCO and Snapchat have turned people into photographers and video makers, and Substack is turning people into writers.” And now Rapchat wants to tap the world for rappers.

“Rapchat has created a music studio that fits into your pocket,” said Nico Wittenborn, lead Investor at venture capital firm Adjacent, in a statement. “It decreases the friction of creativity by allowing anyone, anywhere in the world to record and publish music straight from their phones. This mobile-enabled democratization of technology is what Adjacent is all about, and I am super excited to support the team in building out this next-level music platform.”

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Erase All Kittens raises $1M Seed round for Mario-style game which teaches girls to code

Erase All Kittens (EAK) is an EdTech startup that created a ‘Mario-style’ web-based game designed for kids aged 8-12. However, the game has a twist: it places an emphasis on inspiring girls to code (since let’s face it, most coding tools are created by men). After reaching 160,000 players in over 100 countries, it’s now raised a $1M Seed funding led by Twinkl Educational Publishing, with participation from first investor Christian Reyntjens of the A Black Square family office, alongside angel investors, including one of the founders of Shazam.

While the existing EAK game is free, a new game launched in July will be paid for, further boosting the product’s business model.

EAK says its research shows that some 55% of its players are girls, and 95% want to learn more about coding after playing its game. EAK is currently being used in over 3,000 schools, mostly in the UK and US, and its traction increased by 500% during the lockdowns associated with the pandemic.

It’s Erase All Kittens’ contention that coding education tools for children have been largely built by men and so naturally appeal more to boys. With most teaching repetitive coding, in a very rigid, instructional way, it tends to appeal more to boys than girls, says EAK.

The female-founded team has a platform for changing the perception that kids, especially girls, have of coding. After R&D of two years, it came up with a game designed to teach kids and girls as young as 8 skills such as HTML, CSS, and Javascript in a highly gamified, story-driven gameplay. Kids get to chat with characters on their journey, for example, a serial entrepreneur unicorn mermaid called Tarquin Glitterquiff.

“Players edit the code that governs the game environment, building and fixing levels as they play in order to save kittens in a fantasy internet universe,” said cofounder Dee Saigal, co-founder, CEO and creative director. Saigal is joined by co-founder Leonie Van Der Linde; CTO Rex Van Der Spuy; Senior Games Developer Jeremy Keen; and 2D Games Artist Mikhail Malkin.

Erase All Kittens game

The existing game teaches HTML skills and how to create URLs, and the new game (released in July this year) will teach HTML, CSS, and Javascript skills – bridging the huge gap between kids learning the concepts and being able to create on the web like developers.

Said Saigal: “We’re designing a coding game that girls genuinely love – one that places a huge emphasis on creativity. Girls can see instant results as they code, there are different ways to progress through the game, and learning is seamlessly blended with storytelling.”

Saigal said: “When I was younger I wanted to be a games designer. I loved coming up with ideas for games but coding had always seemed like an impossible task. We weren’t taught coding at school, and I couldn’t see anyone who looked like me making games, so I didn’t think it was something I could do.”

“Whilst researching our target audience, we found that one of the biggest obstacles for girls still begins with gender stereotypes from an early age. By the time girls reach school, this snowballs into a lack of confidence in STEM skills and lower expectations from teachers, which in turn can lead to lower performance—a gap that only widens as girls get older.”

EAK’s competitors include Code Kingdoms, Swift Playgrounds and CodeCombat. But Saigal says these games tend to appeal far more to boys than to girls.

The new game (see below) will be sold to schools and parents, globally. EAK will also be carrying out a one-for-one scheme, where for every school account purchased, one will be donated to underserved schools via partnerships with tech companies, educational organizations, and NGOs.

Jonathan Seaton, Co-founder and CEO at Twinkl and Director of TwinklHive, said: “We’re really excited to partner with Erase All Kittens, as a digital company Twinkl recognizes the importance of preparing children to succeed in the digital age and we believe through this partnership we can really make a difference.”

“The team is particularly excited about helping further Erase All Kitten’s mission to empower girls and give them the same opportunities to learn to code and build their own digital creations. Ensuring that all children have equal access to opportunities to learn is at the heart of Twinkl’s vision and a key motivation in the development of this partnership for both organizations.”

Erase All Kittens

Erase All Kittens says it is addressing the global skills gap, where the gender gap is increasingly widening. According to PWC, just 24% of the tech workforce is female and women make up just 12% of all engineers, while only 3% of female students in the UK list tech as their first career choice.

Research by Childwise found that 90% of girls give up on coding after first trying it, and if they lose interest in STEM subject by the age of 11, they never recover from that. This is a huge and growing problem for the tech industry and for investors.

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Yousician raises $28M to make music education more accessible

By his own admission, Chris Thür wasn’t the most obvious person to start a music education startup.

Thür (previously a laser researcher) recalled an early meeting with an investor who asked whether he and co-founder Mikko Kaipainen (an electrical engineer) were music teachers or musicians, ultimately going “down the list of all the things that would somewhat qualify us for that world.” Each time, they had to tell him no.

“We were just two people who wanted to play an instrument and felt we were missing out,” Thür said. “Obviously, we were not the only ones.”

While they didn’t convince that unnamed investor to write a check, Thür and Kaipainen did start Yousician, which now reaches 20 million monthly users across its two apps — the music education app Yousician and the guitar tuning app GuitarTuna. And the Helsinki-based startup is announcing today that it has raised $29 million in Series B funding.

Thür (Yousician’s CEO) said that it’s been “a bit of a journey” to get here. The company, previously known as Ovelin, was founded a decade ago, and it originally focused exclusively on kids before finding success with a less age-specific strategy.

Yousician CEO Chris Thür

He described the Yousician app as providing an interactive, gamified approach to learning guitar, piano, ukulele, bass or singing — but not too game-like. Users advance through a standard syllabus, playing for 15 or 20 minutes a day, with the app listening to their performance and awarding one to three stars based on how many mistakes they made. Users get one lesson per day for free, but if they want access to more lessons and the full library of songs (or if they want to learn multiple instruments), they need to sign up for a Premium or Premium+ subscription, with pricing starting at $19.99 per month.

Thür said Yousician allows people to learn music on their own schedule, at a much lower cost than in-person lessons. At the same time, he suggested that it’s not a “zero sum” competition with music teachers; there are teachers who recommend Yousician to their students as a way to keep practicing and learning between lessons.

As an example of how Yousician can help its users, Thür pointed to the story of Karen Gadd, who (as told in the video below) “in one year went from never having played an instrument to performing on-stage” with her band — though he hastened to add that the app is beneficial even if you never perform for anyone else.

“We want to make musicality to be as common as literacy,” Thür said. “Everyone should play from time to time and get all those benefits […] I think learning with a teacher works for many, but unfortunately it doesn’t work for everyone.”

The past year, he said, has been “a difficult year and an interesting year for us.” With students largely shifting to remote learning, “a lot of music lessons didn’t happen,” so Yousician tried to make up for some of those lost lessons by providing free premium subscriptions to more than 100,000 teachers and students.

At the same time, many people became interested in learning an instrument during the pandemic as part of a general focus on self-improvement, leading to “a huge organic increase” in usage. Monthly users grew from 14.5 million to 20 million, while subscriptions increased 80%, with the company bringing in revenue of $50 million last year.

Yousician has now raised a total of $35 million. True Ventures led the round, with participation from new investors Amazon’s Alexa Fund and MPL Ventures, as well as Zynga founder Mark Pincus, LAUNCH Fund founder Jason Calacanis, Unity Technologies founder David Helgason, Trivago co-founder Rolf Schrömgens, Cooler Future founder Moaffak Ahmed and Blue Bottle Coffee Company executive chairman Bryan Meehan.

“Yousician has been the leading platform for music instruction for nearly a decade, and people – now more than ever – are turning to the pursuit of creativity and music with renewed vigor,” said True Ventures co-founder Jon Callaghan in a statement. “We’re proud to stand behind a company and team that brings the joy and excitement of playing an instrument into more homes and families.”

Thür said that with the new funding, Yousician will work the team, improve brand marketing, localize the product and build more relationships with musical artists.

13 investors say lifelong learning is taking edtech mainstream

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TikTok to open a ‘Transparency’ Center in Europe to take content and security questions

TikTok will open a center in Europe where outside experts will be shown information on how it approaches content moderation and recommendation, as well as platform security and user privacy, it announced today.

The European Transparency and Accountability Centre (TAC) follows the opening of a U.S. center last year — and is similarly being billed as part of its “commitment to transparency”.

Soon after announcing its U.S. TAC, TikTok also created a content advisory council in the market — and went on to replicate the advisory body structure in Europe this March, with a different mix of experts.

It’s now fully replicating the U.S. approach with a dedicated European TAC.

To-date, TikTok said more than 70 experts and policymakers have taken part in a virtual U.S. tour, where they’ve been able to learn operational details and pose questions about its safety and security practices.

The short-form video social media site has faced growing scrutiny over its content policies and ownership structure in recent years, as its popularity has surged.

Concerns in the U.S. have largely centered on the risk of censorship and the security of user data, given the platform is owned by a Chinese tech giant and subject to Internet data laws defined by the Chinese Communist Party.

While, in Europe, lawmakers, regulators and civil society have been raising a broader mix of concerns — including around issues of child safety and data privacy.

TikTok hit with consumer, child safety and privacy complaints in Europe

In one notable development earlier this year, the Italian data protection regulator made an emergency intervention after the death of a local girl who had reportedly been taking part in a content challenge on the platform. TikTok agreed to recheck the age of all users on its platform in Italy as a result.

TikTok said the European TAC will start operating virtually, owing to the ongoing COVID-19 pandemic. But the plan is to open a physical center in Ireland — where it bases its regional HQ — in 2022.

EU lawmakers have recently proposed a swathe of updates to digital legislation that look set to dial up emphasis on the accountability of AI systems — including content recommendation engines.

A draft AI regulation presented by the Commission last week also proposes an outright ban on subliminal uses of AI technology to manipulate people’s behavior in a way that could be harmful to them or others. So content recommender engines that, for example, nudge users into harming themselves by suggestively promoting pro-suicide content or risky challenges may fall under the prohibition. (The draft law suggests fines of up to 6% of global annual turnover for breaching prohibitions.)

It’s certainly interesting to note TikTok also specifies that its European TAC will offer detailed insight into its recommendation technology.

“The Centre will provide an opportunity for experts, academics and policymakers to see first-hand the work TikTok teams put into making the platform a positive and secure experience for the TikTok community,” the company writes in a press release, adding that visiting experts will also get insights into how it uses technology “to keep TikTok’s community safe”; how trained content review teams make decisions about content based on its Community Guidelines; and “the way human reviewers supplement moderation efforts using technology to help catch potential violations of our policies”.

Another component of the EU’s draft AI regulation sets a requirement for human oversight of high risk applications of artificial intelligence. Although it’s not clear whether a social media platform would fall under that specific obligation, given the current set of categories in the draft regulation.

However the AI regulation is just one piece of the Commission’s platform-focused rule-making.

Late last year it also proposed broader updates to rules for digital services, under the DSA and DMA, which will place due diligence obligations on platforms — and also require larger platforms to explain any algorithmic rankings and hierarchies they generate. And TikTok is very likely to fall under that requirement.

The UK — which is now outside the bloc, post-Brexit — is also working on its own Online Safety regulation, due to present this year. So, in the coming years, there will be multiple content-focused regulatory regimes for platforms like TikTok to comply with in Europe. And opening algorithms to outside experts may be hard legal requirement, not soft PR.

Commenting on the launch of its European TAC in a statement, Cormac Keenan, TikTok’s head of trust and safety, said: “With more than 100 million users across Europe, we recognise our responsibility to gain the trust of our community and the broader public. Our Transparency and Accountability Centre is the next step in our journey to help people better understand the teams, processes, and technology we have to help keep TikTok a place for joy, creativity, and fun. We know there’s lots more to do and we’re excited about proactively addressing the challenges that lie ahead. I’m looking forward to welcoming experts from around Europe and hearing their candid feedback on ways we can further improve our systems.”

TikTok to open a ‘Transparency Center’ where outside experts can examine its moderation practices

TikTok brings in outside experts to help it craft moderation and content policies

TikTok calls in outside help with content moderation in Europe

 

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2021 should be a banner year for biotech startups that make smart choices early

Michael B. Gray Contributor

Michael B. Gray is partner and leader of the private equity, venture capital and growth companies practice, Neal Gerber Eisenberg.

John Flavin Contributor

John Flavin is founder and CEO of Portal Innovations, LLC.

Last year was a record 12 months for venture-backed biotech and pharma companies, with deal activity rising to $28.5 billion from $17.8 billion in 2019. As vaccines roll out, drug development pipelines return to normal, and next-generation therapies continue to hold investor interest, 2021 is on pace to be another blockbuster year.

The median step up in valuations from seed to Series A is now 2x, higher than in all later rounds. As a result, biotech startups will continue to attract more investment at earlier stages from a larger, more diverse pool of venture capitalists.

This may also change the nature of biotech founders themselves: As a blog post from Y Combinator suggests, these founders are trending younger and perhaps less willing to cede control to VCs and hired executives than they might have in years past (i.e., via the “venture creation” model so predominant among early-stage biotech companies).

Founders are some of the most creative people out there, but legal documentation should be anything but.

As longtime members of the biotech startup community — as executives, entrepreneurs, advisors and legal counsel — we’ve seen our fair share of founder missteps early in the fundraising journey result in severe consequences.

In this exciting moment, when younger founders will likely receive more attention, capital and control than ever, it’s crucial to avoid certain pitfalls.

Clarity trumps creativity

Founders are some of the most creative people out there, but legal documentation should be anything but. Keep it as simple and clear as possible. That means using National Venture Capital Corporation documents that everyone knows and understands, as well as keeping organized documentation for employee intellectual property (IP) assignment and NDAs, option grants, independent contractor agreements, tax documents and other key contracts and paperwork.

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Garry Kasparov launches a community-first chess platform

Four years ago, MasterClass, a platform that sells celebrity-taught classes, invited chess legend Garry Kasparov to teach a class. He said yes, but soon realized that creating a message that could satisfy a majority of players was a “struggle throughout the process.”

While the class did pretty well, Kasparov found it “a little bit annoying” that he had to downplay concepts and stick to a specific structure. So, now, Kasparov is launching a platform he says has been several years in the making: Kasparovchess.

Kasparovchess will be a platform in which legendary chess players will have free reign to share tips and tricks with players from various levels. Financed by private investors, and media conglomerate Vivendi, the company declined to disclose its total capital raised to date.

The platform, produced by Vivendi, includes documentaries, podcasts, articles and interviews between experts and known players in the chess community. Moe than 1,000 videos have been recorded to date, Kasparov said. Beyond content, Kasparovchess will have an exclusive Discord server attached to it and playing zones.

In many ways, it’s a vertical-specific version of the chess MasterClass he did years ago, with a big focus on community and variety. MasterClass, which is reportedly raising funding that would value it at $2.5 billion, has been a leader in the “edutainment” space, which monetizes off of documentary-style entertainment. One of the unicorn’s biggest characteristics, as Kasparov alluded to earlier, is that it has to appeal to a wide audience so subscribers can hop from one class to another. Within the same month, a user could go from a Kasparovchess class to general pontifications from RuPaul on self expression. The more classes that MasterClass can get you to take, the longer you’ll keep your subscription.

Image Credits: Kasparovchess

MasterClass might consider its broad view as a differentiator, but it’s clear that Kasparov views it as an opportunity.

Kasparovchess has a monthly or yearly subscription of $13.99 or $119.99, respectively. The majority of lessons from experts and retrospective analysis on games you’ve played sit behind the paywall. The premium product also grants users access to a database of 50,000 manually created puzzles that allows players to train certain skills. The product will be available to the public by the end of month.

A popular competitor already exists: Chess.com. It’s a chess server, forum and networking site that launched in 2005, with premium subscription that ranges between $5 a month or $29 a year. Kasparovchess is significantly more expensive.

Kasparov says his biggest differentiator will be a focus on community. The long-term goal of Kasparovchess is to connect global chess communities with each other, unearth prodigies that might not have access otherwise and give others access to his experiences. He thinks that remote education during the pandemic has shown the need to have more interactive solutions, beyond buzzy promises.

“It’s time to actually switch from what we’re teaching to how students can apply it,” he said. “And that helps us indirectly because chess has been recognized for centuries as a nexus for intelligence and creativity.”

Kasparov became the youngest world chess champion in 1985. He retired from public chess in 2005, and has since launched a foundation to help children have access to chess worldwide. Most recently, he helped advise for “Queen’s Gambit,” a show about a chess prodigy that became Netflix’s most-watched scripted limited series to date on the platform. The show was so ubiquitously popular that sales for chess boards soon skyrocketed.

“I was so happy because it was the first time where we could see chess as a positive factor,” he said. “We had so many years with chess being seen as potential destruction and something that could push kids to the dark area of psychological instability.”

The freshness of this message mixed with an uptick in remote education has given Kasparov confidence that his years-long project is finally ready to launch.

“It’s not just about teaching the game, or playing the game, or debating the game,” he said. Instead, he hopes people who come to the platform focus on the culture of chess, its survival and its seemingly timeless power.

13 investors say lifelong learning is taking edtech mainstream

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Fortnite-maker Epic completes $1B funding round

How much is Epic Games worth? Well, we’ve long ago surpasses the realm of dollar figures regular humans can contextualize. With its latest round, the gamer hits an equity valuation of $28.7 billion. Yes, “b” for “billion.” That’s a lot of micro-transactions.

Time to start talking metaverse!

Best known for the wildly successful battle royale title, Fortnite, Epic just announced another $1 billion funding round, featuring a $200 million Sony Group Corporation investment. The rest of the list is, predictably, a long one, including [deep breath], Appaloosa, Baillie Gifford, Fidelity Management & Research Company LLC, GIC, T. Rowe Price Associates-managed accounts, Ontario Teachers’ Pension Plan Board, BlackRock managed accounts, Park West, KKR, AllianceBernstein, Altimeter, Franklin Templeton and Luxor Capital.

“We are grateful to our new and existing investors who support our vision for Epic and the Metaverse,” CEO and founder Tim Sweeney said in a statement tied to the news. “Their investment will help accelerate our work around building connected social experiences in Fortnite, Rocket League and Fall Guys, while empowering game developers and creators with Unreal Engine, Epic Online Services and the Epic Games Store.”

Sweeney has plenty of reason to be grateful, as the controlling shareholder.

It’s been a busy several months for the game-maker. The company has been waging an on-going war with the both Apple and Google over in-game payment revenues. A trial expected to feature some of the biggest names in tech is expected to kick off early next month.

Epic has also been using its already extremely deep coffers to purchase game developers and publishing studios, including its March acquisition of Fall Guys-maker Mediatonic. It’s clear the company is amassing a large portfolio of titles through acquisitions, a trend that is almost certain to continue with this latest massive round.

The funding also looks likely to strengthen the company’s ties to Sony, as well. Here’s Sony Group Corporation CEO, Kenichiro Yoshida, also quoted in the press release,

Epic continues to deliver revolutionary experiences through their array of cutting edge technologies that support creators in gaming and across the digital entertainment industry. We are excited to strengthen our collaboration to bring new entertainment experiences to people around the world. I strongly believe that this aligns with our purpose to fill the world with emotion, through the power of creativity and technology.

Prior to this round, the company had raised $3.4 billion, including a a $1.78 billion round last August.

Epic cries monopoly as Apple details secret ‘Project Liberty’ effort to provoke ‘Fortnite’ ban

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