Matt Gudinski of Mushroom makes $10 million Disco investment

“The main benefit with Disco is definitely in the efficiency. It’s saving people’s time, it’s more cost-effective, and investing in start-ups like Disco is definitely part of Mushroom’s strategy going forward.”

Mushroom is Australia’s largest independent music business and comprises more than two dozen companies, including Frontier Touring, Love Police and I Oh You, alongside marketing, music publishing and booking agency arms.

Matt Gudinski, who has worked at Mushroom since he was 17, hinted at plans to soon launch a division of the business that would invest in technology start-ups such as Disco. “We may in the near future launch a new division of the group that is focused a lot more specifically on this space,” he said.

Other investors in Disco include New York-based investment firm Richmond Hill Investment Co, which led the round, along with Bridford Group, Stephen Cook, Future Classic founder Nathan McLay, Tunde Balogun and Neil Jacobsen.

Disco founder and CEO Karl Richter said the start-up had posted revenue growth of about 30 per cent year-on-year since its inception. He did not disclose Disco’s valuation but said the funding would be used towards amping up its suite of artificial intelligence discovery features.

“We’ve long been champions of using AI responsibly to help with the grunt work around tagging and discovery, to free up our users’ time to do more creative work,” Richter said.

“We’ve been in AI and machine learning for years, so we sort of got in before it was topic du jour. And it’s something that we’ve built out internally ourselves.”

The company’s chief operating officer, Pete Nicholson, said that while there was a lot of anxiety in the music industry about how AI will be used, in Disco’s case, it could be used to automatically identify characteristics of songs that would otherwise take humans hours. A team making a Netflix show could, for example, use AI to more easily find the perfect song to fit a particular scene.

Disco is not the only tech start-up turbocharging the local creative sector and helping artists and labels withstand ongoing market turbulence.

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Melbourne-based social media outfit Linktree has pioneered a “link in bio” platform that has 40 million users and now receives about two billion visits a month. It has just launched new social commerce features to help creators – including musicians and influencers – make money online.

Linktree has been widely viewed as a future Canva, or Atlassian, in waiting, having racked up a valuation of more than $1 billion.

After laying off 27 per cent of its workforce, or “Linkies”, last year amid a start-up downturn, it recently went on a hiring spree to land US-based senior executives, poaching Snap’s former vice president of engineering, Farnaz Azmoodeh, to serve as chief technology officer, plus former Headspace chief product and content officer Sam Rogoway to serve as its chief product officer.

Linktree is now testing affiliate marketing functionality – initially with Sephora and Urban Outfitters – that gives creators a commission of between 12 per cent and 15 per cent from purchases originating from their Linktree page. For Linktree CEO Alex Zaccaria, the new features will help creatives make money that they should have already been making.

“Gen Z are very influenced by creators. Why would brands pay for massive billboards or TV ads when they can instead pay modern-day celebrities who influence those purchasing decisions?” Zaccaria said.

“We’re creating that space for creators to monetise, and frankly get the share of value that they’re creating, which they deserve. We think we can be the single go-to place for brands to reach audiences online, and help the tens of thousands of small creators start monetising and getting the share of revenue they deserve.”

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