Roundtable discussion on investing in culture and creative tech

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Roundtable discussion on investing in culture and creative tech - deep dive on AI and the future of music

In an industry often overlooked by traditional venture capital, there’s a massive opportunity to build a dedicated VC brand for creative industries.

Oct 17, 2024

Transcript

In this episode of the European VC podcast, we're diving into the fascinating world of investing in culture and everything that surrounds it.

At the CultTech Summit on November 5th and 6th in Vienna, a dedicated panel discussion is planned, and as a foretaste, we have brought together a panel of experts with diverse backgrounds who are reshaping how we think about culture and creativity through investment. During today’s conversation, we’ll explore:

Overlooked opportunities in this sector
Common traits founders have in this industry
The competitiveness of Europe in the creative space
The role of AI in music and challenges of generative music
Emerging technologies that are shaping the future of creativity and more.

We are joined by Oliver Holle, Founding Managing Partner at Speedinvest, who brings a wealth of knowledge from his experience backing startups across various sectors. Alongside Oliver, we have Severin Zugmayer, Founder of New Renaissance Ventures, who specializes in pre-seed and seed investments, particularly in creative tech.

We’re also excited to welcome Uli Schmitz, Co-Founder and Managing Director of Axel Springer Digital Ventures, an expert in the media and adjacent spaces. Finally, we are completing the panel with Hazel Savage, VP of Music Intelligence at SoundCloud, whose insights into the intersection of tech and music will add a unique perspective to the discussion.

Watch it here or add it to your episodes on Apple or Spotify 🎧 chapters for easy navigation available on the Spotify/Apple episode.

Join us at the CultTech Summit, define the future of culture and technology.

5-6 November, Vienna - Meet the key players in culture & technology, share your vision and enjoy a captivating cultural program. There’s over 30 different events waiting for you — debates, panel talks, showcases, workshops and exhibitions. Add networking and you know all the reasons to participate.

As conference partners, we invite you to join us with a 25% discount - use EUVC25.

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✍️ Key takeaways

The untapped potential of cultural and creative industries (CCIs)

Despite the massive success of companies like Spotify, Adobe, and TikTok, CCIs often don't get the attention they deserve from the VC world. Many see them as niche or challenging to scale, even though they have a substantial impact on culture and consumer behavior.

Venture capital's focus is often skewed toward sectors perceived as more scalable or with clearer paths to monetization, like fintech or SaaS. This perception may prevent VCs from fully realizing the growth potential of CCIs.

The market’s understanding of creative sectors, especially in Europe, is fragmented, which adds to the biases that limit investment. However, this is slowly shifting as more music, gaming, and digital content startups break through these barriers.

Oliver’s perspective:

Oliver Severin, from Speedinvest, shares that roughly 5-7% of their portfolio is CCI-related, with a notable increase in the last 18 months. As more AI and tech tools enable creators, opportunities in music, architecture, and even AR/VR spaces are emerging.

While investments in B2C creative businesses can be challenging, Speedinvest has seen some significant success stories within the CCI space, suggesting the growth potential is there, though often underestimated by traditional VCs.

Hazel’s perspective:

Hazel Savage, a business angel and SoundCloud's VP of Music Intelligence discusses how AI is revolutionizing music production, from metadata generation to AI-driven platforms like Suno.ai that create entire songs from user prompts.

Hazel notes AI's controversial but inevitable role in music, especially with growing legal battles around data sets. However, she emphasizes that AI has plenty of opportunities to support musicians in more practical ways, like mastering and separation tools.

Is Europe set up to lead in the CCIs?

Europe has a deep well of cultural heritage and creative talent, with a rich history in the arts and media. However, the tech infrastructure and VC ecosystem haven't fully caught up to support these industries, especially compared to the US.

There’s untapped potential in Europe’s universities and art schools, yet many startups, especially in music and media, seek capital from US investors to scale.

Uli’s perspective:

Uli from Axel Springer points out that while media companies often rely on subscription and ad-based models, investing in CCIs requires understanding how to balance creative innovation with business scalability.

Ten years ago, many media-related startups in Europe struggled to gain traction. Today, the landscape has shifted, especially as new technologies, such as AI, play a more significant role.

The future of CCIs with new technology.

Emerging technologies like AI, AR, and VR are set to transform the CCIs. AI-generated music and digital art are already making waves, but the true potential lies in combining these technologies to create immersive, interactive experiences.

While the tech adoption curve for AR/VR hasn't hit its "iPhone moment" yet, there’s growing excitement about what the future could hold, especially among younger audiences.

Uli’s perspective:

Uli highlights the promise of media tech, especially where AI and AR/VR converge. However, Europe’s VC landscape remains cautious, with much of the larger funding rounds coming from the US.

The challenge is finding the right balance between innovative technology and market readiness, as many startups in this space still face significant hurdles.

Oliver’s perspective:

Oliver emphasizes the importance of intellectual property as a key asset for startups like Inkitt, which has leveraged its strong IP portfolio to attract major US investors and scale globally. Managing and monetizing IP is becoming one of the central challenges for startups in this space.

Join us at the CultTech Summit, define the future of culture and technology.

As conference partners, we invite you to join us with a 25% discount - use EUVC25.

Get your ticket

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