Business Class: Madison music streaming startup LÜM to close for good | Business News

The closure comes after the startup, which operates out of its East Side office, said at the end of December it was relaunching to build a new digital space using blockchain technology that would have allowed fans to contribute to the financial success of the musicians they support, and without going through a third party like a record label.

The ambitious relaunch even captured the attention of national news outlets — around a week before announcing the closure on Twitter, LÜM CEO Max Fergus appeared on Fox Business along with hip-hop artist Ne-Yo to discuss the startup’s next chapter. Ne-Yo, a Grammy Award winner, is a global ambassador and co-founder for the company.

It represented the company’s emergence into what tech experts call “Web 3.0,” a climate of software and platforms that aren’t dependent on traditional business models like advertising to buy and sell products and services, compared to the internet people know currently.

Prior to that, LÜM’s mobile application surpassed more than 200,000 artists with 600,000 songs across the U.S., among several other accomplishments in three short years of existence — the company overall gave creators a place to share their content directly with fans, and interact with fellow musicians.

“Having the opportunity to lead this team has been the greatest privilege of my life,” wrote Fergus in an email statement to the Wisconsin State Journal. “I had the pleasure of getting to watch friends and teammates become leaders. I am excited to see the impact that our team to continues to have on the world.” 

Fergus declined to go into detail about why the startup decided to close so suddenly, citing legal concerns. But he said more details about the closure are to come within a matter of days to weeks.

The startup, born out of a think tank session Fergus had with five other friends in November 2017 and having received millions in financing, launched to advocate for the lesser-known musicians who might not typically have a platform to promote their work and make money.

Global music revenues are expected to top $142 billion by 2030, financial experts predict. But Rolling Stone reported in 2018 that musicians only garner 12% of the money the industry makes.

Now, while users are still able to open the LÜM app on their device, they are met with an error and some code rather than content. The startup’s website appears to no longer be active as well.

LÜM’s relaunch would have allowed its users to collect, sell and trade “Access Passes” that were supplied by their favorite musicians. Artists would themselves have been able to sell digital assets in the form of “non fungible tokens,” or NFTs, to fans.

NFTs, a recently trending topic in the tech community, can be anything digital, like a drawing, a song or even certain items in video games. The tokens can sell anywhere from $10 to millions, and no one can replicate them once made. Using the blockchain, also known as a digital ledger or recording device, artists would be able to keep track of who owns the NFT.

In 2021, the startup launched a digital music marketplace called “The Exchange” where creators could buy and sell each other’s services. And in 2020, the startup became the first platform allowing fans to support artists through virtual gifting technology called “Notes.”  

Three years ago, the company partnered with one of Madison’s largest concert promoters Frank Productions to expand awareness of relatively unknown musicians. Frank Productions was also a key participant in a total $1.2 million investment in the startup.

In 2018, the startup won the Greater Madison Chamber of Commerce’s Pressure Chamber contest. 

“More than anything, LÜM was able to grow a beautiful community of artists and fans that have a love of music, and never had the opportunity to share that together,” Fergus wrote. “I am also grateful for the entrepreneurial community in Madison and all of the amazing people that helped support us along the way.”

A Madison-based startup that seeks to bridge the information gap between the Wall Street broker and the novice retail investor has garnered $2 million in investment funding.

Quiver Quantitative, launched in 2020 by twin brothers Chris and James Kardatzke, uses computer code to “scrape” stock data from across the web, and assemble it in a free online dashboard. One dashboard depicts how members of the U.S. Senate trade stocks, while another displays the recipients of government contracts. Other dashboards include posts from Reddit and other social media sites. 

Some of the startup’s hundreds of thousands of users also have the option of buying a product that lets them build their own stock research tool on top of Quiver data feeds.

The startup, which employs five full-time workers and a few part-timers, plans to use the funding to hire up to four software engineers, James said. 

“That’s our first priority,” he said, adding that some new products are “in the pipeline” as well. 

• Madison-based American Family Insurance published its annual financial report this week. The company achieved a net income of $735 million, an increase from $403 million in 2020, according to the report. 
• Madison’s Summit Credit Union said Thursday that the financial institution will acquire West Bend-based Commerce State Bank. The acquisition is Summit Credit Union’s first. Together, the companies have a combined $6 billion in assets, and will have 54 locations. Commerce employees “will remain part of the combined organization,” Summit said Thursday. 
• Based on a majority member vote, the merger between Heartland and Dane County Credit Union is slated to move forward. The businesses will become a $600 million organization serving around 37,000 people. The organizations did not say how the merger would impact employees of both credit unions.
• Nurse Disrupted, a Madison startup that provides telehealth services and infrastructure for various organizations, has partnered with 24/7 nurse triage provider Conduit Health Partners to expand its services for homeless people. 
• Madison’s TDS Telecommunications has appointed Michelle Brukwicki as its senior vice president of finance and chief financial officer. She has more than 20 years of experience in accounting, strategic planning and finance, according to a statement from TDS.
• U.S. Bank, which has locations around the country, donated $127,000 to the Urban League of Greater Madison to help 51 families become first-time homeowners.