Stem, a Los Angeles-based music distribution and payments company, raised $20 million in funding from QED Investors and Block.
Why it matters: This gives us a glimpse into how Block (formerly Square) plans to position itself in the music industry after it controversially acquired a majority stake in Tidal, the streaming service founded by Jay-Z.
How it works: A single song may have a multitude of stakeholders — from producers, streaming services, and co-artists, to Peloton and private equity owners — that make tracking who owes who what, difficult.
Background: Just over a year ago, Block agreed to buy Tidal in a deal valued at roughly $300 million. The financial heavyweight hinted it would bring more financial tools to Tidal, but stayed mum on the specifics.
Of note: Block's Tidal acquisition is still raising eyebrows over the valuation compared to the latter company's market position.
Still: The music industry is only getting ever more complex.
Bottom line: Fintechs are coming for the music industry.