Software maker Output got a very big investment for growth – $45 million Series A funding from Summit Partners. Here’s what it may mean, direct from the source.
Output is the creation of ASCAP winner Gregg Lehrman, who cut his teeth working with Hans Zimmer and went on to a career as a successful sound designer before starting his own shop. Output’s work was something I wrote about early on – they seemed to really get both the workflow desires of new users, and the kind of creative, on-trend sounds people wanted. Soundware had been such a conventional niche that (pun intended) a lot of products have seemed stuck on loop. Output was different – slick UIs, future-thinking sounds, and more recently Arcade as an easy subscription-based tool for playing creatively. (They also make a cool desk, as in the kind that’s made out of wood, but I assume that is not the primary reason they’re getting funded!)
Arcade is what’s fueled some meteoric growth. According to Output:
- More than 50% of sessions result in the writing of a new track
- The average user locks in a track within fifteen minutes
- 420,000+ musicians using Arcade since its 2018 launch
- 300% increase in monthly recurring revenue in the past 12 months (uh, hello lockdown?)
They’ve got big users behind them, too. (They point to tracks for Drake, Coldplay, Justin Bieber, and Rihanna plus soundtracks Stranger Things, Game of Thrones, and Black Panther.)
They’re now in some 167 countries, but there’s presumably room to grow – and that’s where the investment comes in.
Summit Partners came through with $45 million in Series A investment, the first-ever fundraising for Output. Summit for their part have a big software and tech portfolio. This isn’t their only outing in music, either – they also have invested in online marketplace Reverb.com.
And actually, the fact that it’s those two names that come up makes sense. Figure that as we move to a world of music makers and not just old, record industry-model music consumers, what you get is a bunch of people trading instruments and gear, and looking for tools that make it easy to make tracks. Reverb and Output are a pretty on-point place to start for 21st century companies serving those markets.
So where will the company spend the money? I spoke with Gregg Lehrman, CEO and founder.
The investment will go to growth in staff, customer base, and product line, he says. And yes, they’ll be hiring – good news at a time when the music world has it rough. “We anticipate growing from 55 current employee to north of 100 in the coming year,” Gregg says.
They also promise more “playable instruments.” That means more software – “sampled chromatic instruments in our Arcade Ecosystem,” says Gregg. “The goal is to have a single app (both plugin and standalone) that covers all aspects of sound creation (vs sound manipulation / effects) built into a clean and unified experience,” he says.
There’s also a move into mobile, which Output hasn’t yet touched. They’ll be launching their first mobile app early next year, “and it will complement the Arcade ecosystem in an unexpected way,” says Gregg.
I don’t know what that means – well, I guess if I expected it, it wouldn’t be unexpected – but I welcome any bets. Maybe it’s telling at the same time that Output achieved its growth and got funding without mobile applications, but I’ll be curious to see what they’re doing. And mobile devices themselves are reaching a new inflection point as far as interaction, with this generation of phones boasting new display, touch, and (crucially) powerful camera and augmented reality features. That’s certainly evident on iOS this month, but Android devices are entering new territory, too.
All in all, this is a space to keep tuned in. Music-making was supposed to follow photos and video in democratization, but it’s still stuck in some kind of niche – one where I’m sure investors are hoping to find that big payoff.
We’ve seen some investment that failed to translate in usable ways for musicians, and as a result, didn’t achieve growth – that’s without question. Some of the missteps at Avid, SoundCloud, Native Instruments, and ROLI make that apparent (in their respective ways). At the same time, other companies have proven they can grow without going to much outside funding – Ableton has been outspoken on that issue, just looking here to Berlin. On the other hand, Output’s plans are clearer and I would argue more user-focused than some of the more prominent investments in this area. That is, it sounds like they’re spending on something users are actually asking for.
We’ll be watching.
Output Announces $45 Million Series A Investment From Summit Partners