LÜM, a Madison startup building a streaming music platform and social network that helps up-and-coming artists grow their fan base, is catching the attention of not just Wisconsin investors, but also of Grammy-winning musical artists.
The startup announced Monday that it raised $3 million in a seed funding round led by the Wisconsin Alumni Research Foundation (WARF). Undisclosed angel investors, advisors and other institutional investors also participated.
In addition to the funding, LÜM revealed that NE-YO, the Grammy award-winning R&B artist known for hits like “So Sick” and “U Deserve,” has joined the startup as an ambassador, and will help bring awareness to the app and its unique method to monetize music.
“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.
Last year, LÜM raised $750,000 in a round led by Frank Productions, a Madison-based concert promoter, and other undisclosed investors. To date, the startup has raised $4 million, said LÜM CEO and co-founder Max Fergus, who was previously named one of Wisconsin Inno’s 25 Under 25.
Founded in 2018, LÜM has built a music streaming app that allows any and all artists to upload their songs and create a fan base. The service is free for consumers and artists make money through direct-to-artists subscriptions and a virtual gifting feature.
LÜM now has about 70,000 artists that have uploaded more than 200,000 songs, with 100,000 consumer users, Fergus said. Since LÜM launched tips, which the startup calls “notes,” listeners have gifted more than 20 million notes to musicians on LÜM, Fergus added.
Besides NE-YO, other artists using the platform include Devvon Terrell, DAX and Mickey Valen.
“Even though we are really in our infancy, we’re starting to see that the business model behind LÜM isn’t just applicable for emerging artists, but can be applicable to every single artist in the industry,” Fergus said. “Millions of Americans have always said that they believe that emerging musicians deserve to make more money and now we’re proving it in real time.”
Right after the Covid-19 crisis hit the U.S., LÜM was selected as Apple’s app of the day, which piqued the interest of investors, Fergus said.
“It spurred a lot of investor interest,” he said. “Even though we weren’t necessarily planning on raising a round so soon, given how fast LÜM is starting to grow, it was something that made a lot of sense for us.”
LÜM, which currently employs 15 people, will use the new funding to launch a web-based and Android platform.
In the future as LÜM continues to grow, Fergus said he will explore all options of growth as it makes sense for the company and its users—whether it is partnering with or merging with a larger streaming entity.
“We’ll always be open to forming larger partnerships or relationships, and we’ll always look at every opportunity that’s available to us that can provide the type of synergies for the users that we care so much about,” Fergus said. “It’s definitely been an exciting year and now we’re looking toward the future.”
