The unstoppable rise of Swedish music tech
This story was produced by our colleagues at the BBC.
Streaming giants Spotify and SoundCloud were both founded in Stockholm, and over the past two decades the Swedish capital has developed a reputation as a European hub for companies blending music and innovation. So why does this small Nordic city punch above its weight in music tech, and are start-ups still able to thrive there after a rocky few years for the global economy?
Per Sundin’s 15th floor office has huge windows overlooking Stockholm city center. He’s a big name in music tech; he used to work for Universal Music and persuaded them to start collaborating with Spotify back in the mid 2000s. He’s also an investor and now runs Pophouse Entertainment– a company that creates stage shows using avatars.
Sundin says tax cuts on home computers in the 1990s and early investment in broadband helped Sweden get ahead.
“Kids started to game, kids started to download music and movies, but they also started to find new ideas,” he said.
Those kids included Daniel Ek who went on to found Spotify. The streaming platform SoundCloud and Teenage Engineering, a popular consumer electronics company, were also born in Stockholm. Other success stories include Epidemic Sound, a platform for rights-free music for content creators, and Soundtrack Your Brand, which provides a subscription service for businesses so they can play commercial music without licensing issues.
Ankit Desai is one of the latest crop of founders in Stockholm inspired by the city’s earlier success stories. He launched his startup, Snafu Records, in 2019. It’s a label that uses AI to trawl the internet to find marketable new artists, as Desai explained.
“We will reach to their manager or directly to the artists themselves, and say, ‘We think that we could help you amplify your music and your voice and your talents. Why don’t you partner up with Snafu? We’ll buy some of your rights, and together we’ll split the profits,'” he said.
And the stats back up the Swedish success story. Seedtable, a platform that tracks the fastest growing companies in Europe, lists 69 music and audio startups to work and watch for in 2024.
Snafu and 12 others are in Stockholm, more than any other city in relation to population size. But profitability remains an issue for many companies. Snafu hasn’t broken even. Nor has Corite, a company that helps artists fund music through crowdfunding, according to its co-founder and Chief Operating Officer Emelie Olsson.
“We’re about to raise money again and people are talking about how hard it is to raise money at the moment. I think companies have a bit more to prove a bit earlier than before,” she explained.
It might be hard for new companies to break through but back in his office, Sundin said the pitches he’s still getting from founders make him certain Sweden’s music tech scene will keep thriving.
“There are so many crazy but also genius ideas coming through,” he said. “So I see a lot of confidence in what’s happening in Sweden, and I believe it’s going to continue.”
There’s skepticism in some quarters because of the number of start-ups failing to turn a profit. Even Spotify reported a loss of around $75 million in the final quarter of last year. But the company is seeing an increase in subscribers, and there are signs things are picking up for the global economy. So Sweden’s music tech start-ups are hoping that means fresh investments — or lucrative exits — are on the way soon.
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