Tencent backs digital rights startup Pex in $57M round
Pex, a startup aiming to give rightsholders more control over how their content is used and reused online, has raised $57 million in new funding.
The round comes from existing investors including Susa Ventures and Illuminate Ventures, as well as Tencent, Tencent Music Entertainment, the CueBall Group, NexGen Ventures Partners, Amaranthine and others.
Founded in 2014, Pex had previously raised $7 million, and it acquired music rights startup Dubset last year. Founder and CEO Rasty Turek told me that while the product has evolved from what he described as "a Google-like search engine for rightsholders to find copyright infringement" into a broader platform, the vision of creating a better system of managing copyright and payments online has remained the same.
The startup describes its Attribution Engine as the "licensing infrastructure for the Internet," bringing together the individuals and companies who own content rights, creators who might want to license and remix that content, the big digital platforms where content gets shared and the law enforcement agencies that want to monitor all of this.
The product includes six modules — an asset registry, a system for identifying those assets when they're used in new content, a licensing system, a dispute resolution system, a payment system and data and reporting to see how your content is being used.
Turek said that while Pex is being used by "most of the largest rightsholders in the world," the system was built to be accessible to "a struggling musician out on the streets of Los Angeles" who doesn't have the resources to "police all of this content" online.
Pex CEO Rasty Turek. Image Credits: Pex
He also suggested that the broader regulatory environment is calling for a solution like Pex, with the European Union passing a new copyright directive that's set to take effect this year, and new copyright legislation also on the table in the United States. The EU bill was criticized for potentially prompting larger platforms to preemptively block broad swaths of content, but Turek argued, "There's so much content out there in search of an audience that this is going to be the opposite of overblocking."
Not that Pex is relying entirely on regulators. Turek also said the platform is structured to balance the needs of the different groups using it — and that it has an incentive to strike that balance because its revenue comes from licensing deals, so it's focused on "really being the Switzerland, really being the neutral party."
"We designed all of our business around the idea that if we try to abuse the system, we lose, too," he said. "We don't make money [when someone] abuses the system, we only make money when everybody plays nice."
Turek also claimed that public domain and Creative Commons licenses are "first-class citizens" on the platform, and that many of the rightsholders using the Attribution Engine don't necessarily want monetary compensation: "A lot of people are happy to do this for recognition. We are social animals." (Plus, recognition can lead to moneymaking opportunities.)
Pex says the new funding will allow it to continue scaling the Attribution Engine.
"I don't believe investments are validation," Turek added. "I believe they're more obligation than validation, but they do prove you are directionally correct."