South African fintech start-up Sunkambe has launched its music investment platform that allows individuals and savings groups to own a share in artist’s future potential revenue for 18 months.
The platform allows label backed and independent artists to raise between R50000 and R250000 to record, distribute and launch an album by forfeiting a percentage – between 15-45% of future potential revenue based on an artist’s valuation.
The Innovation Hub based start-up was founded by former IBM client executive, Shaka Ramulifho last year and went live to the public on the 20th July 2018.
Ramulifho explains: “Historically, the music industry has focused on production, distribution and promotion of music. The financing aspect has been relatively neglected and unserved by traditional banks. For example, we have a record label user on the platform who has struggled for years to raise finance from banks that in January 2018 leveraged his provident fund in order to raise finance for distribution.”
“Sunkambe is a platform where music discoveries of artists happen. If you like their music, you can also vote, share or invest in their campaigns.”
Sunkambe manages the bookings, royalty collections, album sales and other commercially significant music related activities that occur within 18 months ensuring that returns are paid to investors.
“We selected 18 months, after we took into account data around the rate of change of music in general and activity spikes in terms of sales and booking revenue between the launch of an album and 24 months later. We found during our research that it is most rewarding between one and 18 months”
Record labels and independent artists are able to create a profile for free and Sunkambe takes a 15% commission on raised capital on the platform.
The Sunkambe app has features such as bookings – which allows artists to update upcoming events including revenue earned and a streaming feature – which allows artists to be paid for their music on the platform and allows listeners to be paid for streaming music on the platform creating an engaged and active community of listeners.
Ramulifho explains: “Our streaming feature operates differently. Streaming revenue gained by artists is paid directly into their campaign on Sunkambe reducing music rights traded and investors digital wallets are paid when they stream, vote or share what they are listening to. The money can be used to invest, buy airtime or withdraw as cash.”
The startup was selected to pitch at Seedstars World Summit’s startup garden in April, the company was last year among five entertainment tech startups selected to join SA telecoms company Liquid Telecom’s Liquid Launchpad. This subsequently led to the investment platform pitching at AfriCom.
In addition, the startup has been incubated at Tshimologong Digital Precinct and also won last year’s MIT Global Startup Programme and was top seven in the 2017 Standard Bank Innovation Challenge.
Sunkambe plans to launch an exchange that will allow investors to buy and sell their music rights in the next few months.
“The exchange will be able to determine the daily, weekly or monthly value of an artist by means of crowdsourcing the price point from different investors.”