Madison-based music app LÜM teams up with Ne-Yo, gets $3 million to expand platforms
There haven’t been a whole lot of success stories in the music business during the pandemic, but LÜM is one of them.
Developed by University of Wisconsin students in 2018, the music discovery streaming app launched for Apple’s iOS in July 2019, growing to about 100,000 users, 200,000 song uploads and 15 full-time employees in the year since.
Now the Madison-based startup is looking to accelerate its growth, partnering with R&B star Ne-Yo and raising $3 million for its expansion.
“It’s going to continue to help us in doing more things like putting more money in the pockets of independent artists,” CEO and co-founder Max Fergus told the Journal Sentinel. “Over the course of the next few months we’ll be launching our Android and Web platforms and bringing LÜM to hopefully millions of additional users across the U.S.”
When LÜM launched, its selling point was to serve as a platform where emerging artists could better brand themselves in addition to sharing their songs, more or less merging the Facebook and Spotify user experiences.
But key to the app’s growth has been its Notes virtual currency system that was introduced in January, Fergus suggests. Each note equates to about half a cent, or the approximate royalty earned for a stream on Spotify. Users earn notes for various accomplishments, but they can also purchase notes to donate to artists that can be redeemed for actual currency and be rewarded with badges that broadcast their level of support.
“It’s all based around trying to create
closer relationships between fans and artists,” Fergus said. “(LÜM users) believe independent artists deserve more than what they’re paid normally through an average music streaming service . ... The average royalty payout is half-a-cent per stream, but artists on LÜM get an average of three to five cents, all on voluntary support.”
That model helped Fergus secure an additional $3 million in funding, after initially closing with $1.2 million in funding last year. Among those new investors in LÜM is the Wisconsin Alumni Research Foundation.
“WARF is a research affiliate of UWMadison, and they’re mostly focusing on licensing IP and writing grants for things like health care and bio tech,” Fergus said. “This is one of the first times we’re seeing a university affiliate invest in an undergraduate student business.”
And through a family connection, Fergus met with Ne-Yo, who has signed on as LÜM’s global ambassador.
“We connected through a shared love of independent emerging artists and music advocacy,” Fergus said. “NeYo is only joining the LÜM team for one reason, to bring more exposure to the power of our platform.”
As part of his new role, Ne-Yo is behind a remix contest for his new single “U 2 Luv,” featuring Jeremih, with the winner earning a million notes and being promoted by Ne-Yo as one of the song’s official remixes.
“I am honored to join the LÜM team as we embark on making fundamental changes to the music streaming industry that will allow us to give back to the music creators and will significantly impact the digital distribution of music,” Ne-Yo said in a statement.
Contact Piet at (414) 223-5162 or plevy@journalsentinel.com. Follow him on Twitter at @pietlevy or Facebook at facebook.com/PietLevyMJS.
Piet also talks concerts, local music and more on “TAP’d In” with Jordan Lee. Hear it at 8 a.m. Thursdays on WYMS-FM (88.9), or wherever you get your podcasts.