Tencent Confirms Purchase of Minority Stake in AI-Based A&R Platform Instrumental

Yesterday (October 27), MBW discovered that data-driven A&R platform Instrumental had sold a minority stake in its business to Tencent Holdings and Tencent Music Entertainment (of which Tencent Holdings, of course, is a majority shareholder).

Little was known about the deal at the time of writing, but an official confirmation of the partnership has now been released.

According to the press release, the transaction will allow Tencent and TME to hold a minority stake in Instrumental’s business, alongside UK manufacturer Blenheim Chalcot and Warner Music UK Limited, both existing investors in Instrumental. (Warner acquired a stake in Instrumental in 2015).

Along with the financial investment, the deal sees Instrumental enter into an exclusive distribution partnership with Tencent Music Entertainment Group in China, one of the world’s fastest growing music markets.

The deal will benefit roster of independent artists licensing tracks in Instrumental’s frtyfve branded label services and publishing arm.

Direct or DIY artists are the fastest growing sector of the global recorded music industry, worth $873 million in 2019 and expected to exceed $1 billion in 2020, according to analysts at the Midia Research sector.

Instrumental’s platform is used by all three major labels, Live Nation and a range of brands and media companies to seek out new prospects for their businesses.

“We are extremely excited about our new strategic investors, Tencent and TME, and the opportunity we now have to achieve great things together.”

Conrad Withey, instrumental

Instrumental CEO Conrad Withey said, “We are incredibly excited about our new strategic investors, Tencent and TME, and the opportunity we now have to achieve great things together.

“Like us, Tencent has identified the power and potential of data science in discovering and developing new high-potential artists.

“I look forward to working with Tencent and TME, including the opportunity to expand our business in China. This agreement will allow Instrumental to accelerate our commitment to becoming an “artist-first” company, providing insights and partnerships directly to great talent discovered through our app.

“This includes expanding our label and publishing services, but also launching new products that meet the needs of high-growth artists in the early stages of building a career in the music business, including merchandise, live digital events and brand partnerships.”

“Instrumental’s unique blend of data science, artificial intelligence and innovative business models for a new music streaming industry is a perfect fit with Tencent’s global investment strategy.”

Ling Ge, Tencent Holdings

Tencent Holdings, Chief Representative for Europe, Ling Ge, added, “Instrumental’s unique blend of data science, artificial intelligence and innovative business models for a new music streaming industry is a perfect match for Tencent’s global investment strategy.

“We look forward to working with Conrad and the team to grow the business both in China and internationally and further establish it as a leader in its field.”

“The cooperation with Instrumental will definitely bring greater impetus to TME’s innovation in the application of AI technology, as a win-win combination of better service for our users, good promotion for artists growing and sound development of the entire online music industry.”

Dennis Hau, Tencent Music Entertainment Group

Tencent Music Entertainment Group, Group Vice President, Dennis Hau, added, “As China’s leading online music entertainment platform, TME has always been committed to capitalizing on advanced and emerging technologies to transform its services , amplify social features to encourage user engagement.

“With years of advanced research and application of artificial intelligence technologies, we have improved the efficiency of selecting, discovering and distributing quality content and promoting the growth of artists, which which has enabled our hundreds of millions of users to enjoy more diverse and high-quality content.

“The cooperation with Instrumental will definitely bring greater impetus to TME’s innovation in the application of AI technology, as a win-win combination of better service for our users, good promotion for artists growing and sound development of the entire online music industry.”

“The investment from Tencent and TME recognizes the opportunity we have to change the way emerging artists are discovered and advance their careers.”

Charles Mindenhall, Blenheim Chalcot

Blenheim Chalcot’s Instrumental co-founder and chairman, Charles Mindenhall, said: “Conrad, Abi and the team have done a great job of establishing Instrumental as a unique player in the rapidly changing music industry.

“The investment from Tencent and TME recognizes the opportunity we have to change the way emerging artists are discovered and advance their careers.

“Alongside our new investors and Warner Music, we look forward to continuing to support them on this journey.”


Elsewhere, Tencent led a consortium that acquired 10% of Universal Music Group in March this year for more than $3.3 billion.

Tencent, which has a 9% stake in Spotify, also has a 1.6% stake in Warner Music Group.

London-based Instrumental’s tech spotted huge tracks like Lil Nas X, Tones & I and Arizona Zervas months before these artists signed major label deals that helped their careers take off.

In 2018, the company launched its in-house label, Frtyfve, which allows it to invest early in emerging artists spotted by its own technology.

Instrumental raised $4 million two years ago to fuel its “aggressive growth plan.”The music industry around the world

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