Rappers Out in Silicon Tryna Get Their Billions On

Rappers Out in Silicon Tryna Get Their Billions On

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.


Nas

Nas (r) with his partner Anthony Saleh

Nas is without a doubt the most prolific rapper-turned-tech-investor. He co-founded QueensBridge Venture Partners and has invested in 119 companies with five portfolio company exits:

  • 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.

Click to see interactive chart on Tableau for details on all startups invested.

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.
Nas with investor Ben Horowtiz and Facebook’s Mark Zuckerberg

Dr. Dre

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.

Click to see interactive chart on Tableau for details on all acquisitions with reported amount.

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.

Jimmy Iovine, Tim Cook, Dr. Dre and Eddy Cue at Apple headquarters

Jay Z

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.

Beyond Tidal, Jay Z is also a prolific tech investor who has gotten involved in a handful of startups, including Julep, JetSmarter, BlackJet, Stance (with Nas), and Viddy (acquired in 2014).

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.

Jay Z freestyling at B-Sides Concert

Snoop Dogg

Snoop at TechCrunch Disrupt

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.

Vice’s Shane Smith and Google’s Larry Page with Snoop Dogg and his partner Ted Chung

will.i.am

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.


Chamillionaire

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.


MC Hammer

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.


Will Smith

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 West

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).

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The Road to RAW

The Road to RAW

The Road to RAW

RAW was a project I had been working on for many years. It began when friends of mine were smoking a brand of “natural” cigarettes. They told me how they preferred these cigarettes because they were additive free without all the chemicals of a regular cigarette. As I was listening to this, I would be staring at the bright bleached white paper thinking to myself “if they can make an additive free natural tobacco, why can’t I make a natural unbleached unrefined paper to wrap it in?” And thus, the RAW project began. Getting RAW to market was, without a doubt, the most difficult project I have ever undertaken. Everywhere I went the material suppliers would try to discourage me. I even approached a materials supplier that was owned by our competitors in Barcelona. They said in Spanish (while laughing at me), “Josh, nobody will want to smoke a paper bag”. Time and again, I would try to explain my idea, how the paper would be super thin and translucent, how the plant materials I blended would yield the perfect burn, how its’ beautiful brown hue would be nothing like anyone had ever seen before for rolling papers, but to no avail. I was at the point of giving up, but I just couldn’t get the mental picture of what I imagined for RAW out of my head, and somehow I became even more determined than ever to launch RAW. In the end, I invested all the knowledge and most of the money we had made with Juicy Jays and Elements into RAW and brought it to market. Smokers everywhere agreed with my dream, and RAW has been my biggest success. It turns out, the same factories that negated and poked fun at me are now producing RAWplicas. How classic is that.

The Birth of Cigarettes

The Birth of Cigarettes

The Birth of Cigarettes

My history with RAW cannot be told without first telling a little of the history of the creation of the first cigarette paper long ago, at the time of the voyages of Christopher Columbus It all began when Columbus returned from one of his voyages to the “new world” (Cuba), with something new – cigars. These cigars, however, weren’t like the cigars we have today. They were loosely rolled in multiple layers of either palm or tobacco leaves and tied with an adjustable string. Since the Spanish aristocrats were always especially interested in anything exotic and foreign, they immediately took to smoking these coveted cigars. However, because they had to be transported across the Atlantic in ancient wooden ships, these cigars were incredibly expensive and difficult to get which made them available only to the rich. The only way the Spanish peasants could manage to get their hands on some of this rare and valuable tobacco was to collect the leftover butts discarded to the ground by the aristocrats. They would untie the cigar butt, re-roll it in used newspaper, and smoke it. Even these paper cigars were very valuable. The Spanish peasants would inhale the smoke and hold it in their lungs as long as possible in order to get the most out of every puff. And that is how cigarettes were born.

Shine x SLX Ceramic Grinder

Shine x SLX Ceramic Grinder

High Country Healing x Shine Mini-J’s

High Country Healing x Shine Mini-J’s

High Country Healing x Shine Mini-J’s

VAPORIZERS & RAW ROLLING PAPERS

Fog Pen Vaporizer Kit

RAW

Since 2008, the quantity of U.S. vape shops has exploded to about 8,500, and also the sale of portable vaporizers and supplies climbed to $3.5 billion, according to Wells Fargo Securities analyst Bonnie Herzog. She expects U.S. usage of marijuana and vaporizers to overtake combustible cigarettes in Decade.

Marijuana represents an additional lucrative market. IBISWorld, an industry research firm, projects sales of cannabis for medical use to raise to $13.4 billion in 2020 from $3.6 billion in 2015, largely on account of demand from an ageing population with conditions such as arthritis, Alzheimer’s disease and glaucoma.

Today the art work of rolling some pot can happen to adopt a backseat to better method of getting you there, just like the trusty pipe or newfangled dry weed vaporizer. But whether you’re old style or new, there’s nothing quite as enjoyable as smoking an attractively hand-rolled joint. Like line-dried sheets or grandma’s famous pasta recipe, sometimes it’s the care and a focus that’s put in the project which makes the merchandise so enjoyable.

WEED

Now with RAW naturalunrefined rolling papers you can take the joint rolling to a higher level. Nothing you’ve seen prior features a rolling paper contained so much history, smarts and soul. The papers, made exclusively in Alcoy, Spainthe birthplace of rolling papers since 1650, are created with natural fibers and don’t contain chlorine or any other harmful additives.
Josh Kesselman, founder of RAW Rolling Papers, said he became enthusiastic about rolling papers in a early age when his father would perform magic trick that included creating a rolling paper ‘disappear’ into nothing.

From the 1990s, Kesselman would be a full-on rolling paper enthusiast, sharing his rolling paper collection on the web and actually trading with collectors from Europe. At that time, ‘all with the papers available in the U.S. were garbage,’ he says, so he got down to make a superior sort of paper specifically designed for great rolling papers. He recalls an integral meeting that happened after he discovered a man was reopening the oldest rolling paper factory in the world.

At many vape shops, the newest company is typically older nonsmokers struggling with severe illness, as outlined by vape shop owners, customers and specialist.
Patients and medical cannabis groups say they prefer the vaping device for marijuana as opposed to smoking simply because they believe there are lower risks. Some states, including The big apple and Minnesota, prohibit patients from smoking the cannabis. Inside a vape device, the cannabis leaves or concentrate are heated to some temperature that’s below needed for combustion.
Vaping devices, that may be no more than a ball point pen, provide medical cannabis users with an increase of privacy, since vapor released from the heating set up is nearly odorless.
“Vaporized cannabis is a significant trend in the medical and adult use,” said Christie Lunsford, a Colorado-based consultant who targets issues involving cannabis. “It’s consistent, it’s almost instantaneous, and it’s befitting numerous consumers.”

“We think the cannabis market will mimic and mirror the tobacco market,” he stated. “We think they are going to check out this (vapor) as a safer alternative.”
Patients require a doctor’s approval to get the marijuana, which is typically provided by state approved dispensaries, private growers, and – sometimes – their unique plants if they cannot afford the cannabis, which is not covered by most insurance coverage.

Simultaneously, vaping devices go mainstream as the industry pushes them instead of tobacco. Marijuana dispensaries in certain states also sell the electronic products.
But vape shops, making use of their larger choice of devices, have witnessed an uptick in sales especially from consumers who don’t need to shop at tobacco stores or head shops, which cater more to recreational use.