Chainsmokers Band Plans to Invest $50 Million in Startups

(Bloomberg) -- Grammy Award-winning artists the Chainsmokers are expecting to invest $50 million in startups, with a newly formed firm, Mantis.

Musicians Alex Pall and Drew Taggart, who were already investing in startups with their own personal capital, are raising a venture fund.

The duo said that the pandemic will give them more time to focus on investing. “This is the first time in eight years we’ve had the opportunity to kick back and really focus on other things,” Pall said.

The two began fundraising before the pandemic. Taggart said that at first, “all the uncertainty was definitely intimidating” for limited partners. They’ve since been able to line up family offices to join the fund, but Pall acknowledged that “anyone who is saying this is the best time right now would be lying.”

It is not uncommon for celebrities to launch venture funds. Actor Ashton Kutcher and athlete Carmelo Anthony also have firms.

These influential individuals are often able to gain access to competitive venture rounds at companies, in part because of their fans. The Chainsmokers have collaborated with artists including Halsey and Coldplay.

Pall and Taggart said that they plan to use their network to help their portfolio companies and will also take a hands-on investment approach. They said their experience launching a band helps them relate to founders.

“Starting the Chainsmokers isn’t unlike building your own business,” Pall said. The two also have their own founder background, launching a concert-related startup, Yellowheart.

Although it is a difficult time for startups in the live-entertainment business, Mantis is looking for investments that can do well in the pandemic and beyond.

One of its first investments is in Loansnap, a mortgage lending startup. Mantis is co-leading the $10 million investment with True Ventures.

“Interest rates are going to historical and unprecedented lows,” said Taggart, about one of the reasons they invested in Loansnap, which is led by serial entrepreneur Karl Jacob. Loansnap had previously raised $17 million, according to PitchBook.

The pair previously invested in Ember Technologies, which makes temperature-controlled drinkware.

Mantis plans to invest in other startups in financial technology, consumer and media categories.

The Chainsmokers are not deterred by the current economic landscape. “This time allows people to rethink the way things are done,” said Taggart.

©2020 Bloomberg L.P.