Rappers Out in Silicon Tryna Get Their Billions On
Hip-hop’s biggest stars are investing in tech, but who’s really making paper? To find out, we dug through the data.
Inthe past, we’ve combed through hip-hop lyrical data to find relationships between rappers and cars and rappers and weed. This time around, we’ll dig into a topic that’s less straightforward but has been gaining media attention over the past few years: the ever-increasing business activity between rap artists and technology startups.
From Dr. Dre selling Beats to Apple for billions to Snoop blazing through Prisma Labs, more and more rap moguls are getting involved in the tech industry, both as investors and founders. It makes perfect sense that successful rap artists are diversifying their portfolios, moving their hard-earned cash into technology businesses. Let’s take a look at who is involved and what they have achieved.
- Luxola, a Singapore cosmetics e-commerce company acquired by fashion brand LVMH.
- SHIFT, a cross-network social advertising platform for brands and agencies acquired by Brand Networks.
- Fitmob, a cross network fitness membership acquired by ClassPass.
- AlphaDraft, a fantasy sports service acquired by FanDuel
- Synata, an enterprise cloud search engine acquired by Cisco.
QBVP typically invests $100,000 to $500,000 in a company’s early rounds. The following is a chart of all the investment rounds QueensBridge Venture Partners have participated in throughout the years with several highlights.
QBVP invested in several high profile late rounds, including:
- Dropbox, a unicorn startup valued at $10 billion.
- Lyft, Uber’s top competitor valued at $5.5 billion.
- General Assembly, an alternative education community.
Also, several additional investments that’s worth mentioning:
- Investment in Genius, previously known as RapGenius. Started as a rap lyrics knowledge annotation service. A perfect fit for Nas, who clearly provides significant value add beyond capital. Eminem has also invested in Genius.
- Quite a few high profile fintech startups including: Robinhood — free stock trading; Coinbase — a bitcoin wallet & exchange; and Earnest — a technology enabled lender with a focus in student loan refinancing. There’s also Balanced, a payment service that unfortunately went into bankruptcy in 2015.
Apple’s acquisition of Beats Music and Beats Electronics was one of the biggest events in the history of the music business. Dr. Dre founded Beats with his partner Jimmy Iovine and sold it to Apple for $3 billion, making it the company’s largest acquisition ever. To put it in perspective, Apple’s second-largest acquisition was acquiring Steve Jobs’ NeXT Computer for $404 million in 1997, hiring Jobs back after his resignation in 1985.
Some interesting findings from Apple’s acquisitions:
- Apple spent $1.64B on hardware-oriented companies, about 30% more than the $1.17B spent on software companies. However, Apple acquired a total of 61 software oriented companies, compared to 14 for hardware.
- Beats was unique in that it involved hardware (Beats Electronics) and software (Beats Music). This is similar to NeXT Computer, with its proprietary hardware and the OS that later became the foundation for OSX.
Dre was a bit too quick to proclaim himself as the first hip-hop billionaire, or perhaps math wasn’t his strong suit. After equity dilution and taxes he was left with $700 million, slightly behind Diddy’s $735 million, as reported by Forbes in 2015. Dre is now an employee at Apple — the most profitable company in the world — where he’s in production for Apple Music’s first TV series, Vital Signs. It’s safe to say that we can expect to see Dre growing his net worth to a billion in the near future.
Tidal — the music streaming service closely associated with Jay Z — was not founded by the man. This Norwegian/Swedish company wasn’t on anyone’s radar until Mr. Carter acquired it in 2015 for $56.2 million and started calling the shots. Tidal reportedly has 2.5 million total subscribers, with a recent growth spurt credited to the exclusivity of Kanye’s album The Life of Pablo. Tidal is currently valued at over $100 million.
Competing against Spotify’s 27 million subscribers and Apple Music’s 11 million subscribers, Tidal has clear challenges. With negative reviews from the press and a rumored Samsung acquisition reportedly falling apart, it doesn’t look like Tidal is on track to catch the competition anytime soon. Despite this, we have to give it up to Hov for taking a stand against the music streaming titans.
One area where Jay does have an unfair advantage: promoting Tidal with a freestyle that name-checked his tech competitors, performed at the B-Sides concert and aired exclusively via the service.
AsAmerica inches closer to legalizing marijuana nationwide for recreational use, the growing opportunity in the cannabis tech sector looks more and more appealing. As rap’s most well known weed advocate, Snoop raised $25 million and founded his own cannabis-focused venture fund called Casa Verde Capital.
Thus far they have invested in two startups: Eaze — an ‘Uber for weed’ delivery service; and FunkSac, a packaging solution for weed. Snoop also founded weed lifestyle social network Merry Jane, and has invested in a few non-weed related startups such as Reddit, Robinhood (with Nas), and GameOn.
From taking on a creative director role at Intel in 2011 to founding the fashion-tech company i.am+ in 2013, Will.i.am has earned his stripes as a true tech enthusiast and entrepreneur. Though his Puls smart wristbands have had a tough uphill battle against the Apple Watch, Will has earned several successes as an angel investor. The Black Eyed Peas’ founder and frontman shared in the massive exit for Dr. Dre’s Beats as well as fin-tech startup Honest Dollar, which was acquired by Goldman Sachs. Will continues to be an active investor in early stage tech companies, the most recent is audio technology startup Ambidio.
Weall know Chamillionaire’s song “Ridin’ (Dirty),” but few know that besides his success in hip-hop, he also actively involved in tech as an investor and advisor. The online media company that he invested in, Maker Studios, was acquired by Disney for $500 million in 2014, while SayNow — a communication service he advised — got acquired by Google in 2010. He is currently an Entrepreneur in Residence at Upfront Ventures, a VC firm based in Los Angeles.
For many hip-hop fans, Hammer is a has-been pop rapper who squandered a fortune and eventually faded into musical irrelevancy. But in Silicon Valley, he’s a respected entrepreneur, investor and adviser with a reputation as a savvy early adopter of new technology. Hammer founded two tech companies, advised and invested in a dozen or so startups, and is actively involved in tech conferences. Among the musician’s investments are contact-sharing app Bump Technologies, mobile payment company Square, and magazine app Flipboard. From hip-hop to technology, Hammer is still representing the Bay Area.
Given Will Smith’s massive success in Hollywood, some younger generations may not know he was once a popular rapper in the late 1980s under the name The Fresh Prince, alongside DJ Jazzy Jeff. Even fewer people know that he’s an angel investor who is involved with six tech companies, including ecommerce site Julep and social shopping platformFancy. According to a report published by CB Insights, Smith is amongst the top 13 celebrity tech investors.
Kanye is bold, ambitious, and he isn’t afraid to say anything that’s on his mind. He announced a 2020 bid for presidency at the MTV VMA’s and recently asked both Facebook CEO Mark Zuckerberg and Alphabet CEO Larry Page for $1 billion dollars to invest in his ideas. Zuck and Page have reportedly not replied, but if Yeezy does get the billion dollar help, he has big plans for his creative communications empire DONDA (one would assume after he pays off an apparent $53M personal debt).