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Trebel

Three-year-old music startup Trebel, whose app allows users to listen to music for free on-demand and offline, is going public via a Regulation A+ offering, according to a new SEC filing.

Why it matters: The company differentiates itself from other music streamers by letting consumers listen to music for free on-demand and offline with ads — a game-changer for people in developing markets.

How it works: Trebel makes money off advertising and shares that revenue with artists and record labels, explains Trebel CFO Bob Vanech.

  • It's also starting to build a business where brands can sponsor an ad-free, premium music listening session for a user in exchange for consensual data from the user, often shopping data.
  • Trebel currently works with Uber Eats in Mexico to give users a certain amount of ad-free listening days sponsored by Uber Eats in exchange for giving Uber Eats information about users' food orders, with their consent.
  • The company has a patent that allows it to market itself as the only music service globally in which users can download music and listen to it on-demand and offline for free.

Driving the news: Billionaire fashion retailer Chris Burch will commit to an investment of $250,000 to Trebel as it goes public. Burch tells Axios that after meeting with the team's leadership, "I came to believe that they had the experience, intuition and drive to succeed in an ever more complicated world."

Be smart: Right now the company is focused on serving users who are not likely to pay for a premium paid music subscription, which differentiates it from the likes of Spotify or Apple Music.

  • "We’re going after a market that is five times the size of the paid subscription market," said Kevin Mills, Head of Latin America Operations at Trebel.
  • "Goldman Sachs estimates that by 2023 there will be 690 million subscribers. That leaves some 4 billion people looking for an alternative ... Our total addressable market is enormous," he said.

The big picture: Trebel hopes to bring a new business model to the music streaming industry.

  • Executives tell Axios that Trebel has struck relationships with all three of the largest record labels — Sony Music, Warner Music Group and Universal Music Group — to offer 100% of their catalogs at no cost to users in exchange for a cut of the revenue that Trebel makes from ads and promotional partnerships.

By the numbers: The company currently has more 3 monthly active million users, most in Mexico. It's currently in talks with record labels to expand to countries in South America, including Brazil, Colombia, and Argentina.

  • In May, Trebel surpassed Spotify as the #1 app in Mexico's Google Play store in the free music category.
  • Based on December 2020 revenue, the company's annual revenue run rate is $4 million, executives say. It's not yet profitable. The company is putting most of its earnings into growing the company, including marketing.
  • It currently has about 50 employees worldwide.

What to watch: Sources say that a current c-suite level executive at one of the three major record labels will be joining Trebel full time as president in July.

The bottom line: "We developed a system and a patented business model to address the needs of billions of music listeners for whom music is medicine and having access to their music on-demand and offline is not a luxury, but a necessity," says co-founder and CEO Gary Mekikian in the new SEC filing.

Go deeper

Teachers across the U.S. protest laws restricting racism lessons

Thousands of teachers and other educators held protests across the U.S. Saturday against the actions of "at least 15 Republican-led states" that aim to restrict teaching about racism in class, the Washington Post reports.

Driving the news: There were demonstrations in at least 22 cities for the "Day of Action" to raise awareness about moves to limit students' exposure to critical race theory, which links racial discrimination to the nation's foundations and legal system, per Axios' Russell Contreras.

Updated 4 hours ago - Health

Lawsuit challenging Houston Methodist's COVID vaccine mandate dismissed

Houston Methodist Hospital in Houston, Texas. Photo: Brandon Bell/Getty Images

A federal judge on Saturday dismissed a lawsuit brought by 117 Houston Methodist staff over the hospital's policy requiring all employees to be vaccinated against COVID-19.

Why it matters: This is the first federal court ruling on a coronavirus vaccine mandate. Attorney Jared Woodfill, representing the plaintiffs, told KHOU 11 it's "the first battle in a long fight," as he vowed to file another lawsuit soon.

G7 leaders to announce plan to phase out gasoline cars

British Prime Minister Boris Johnson talks next to President Joe Biden and French President Emmanuel Macron at the G7 summit in Carbis Bay, Cornwall, England, on Saturday. Photo: Leon Neal/Getty Images

G7 leaders are set to announce Sunday a range of measures to tackle climate change, including "ending almost all direct government support" for fossil fuels and phasing out gasoline and diesel cars.

Driving the news: The plan was outlined in a British government announcement Saturday, which states that the leaders will also agree to halting "all unabated coal as soon as possible."