Why VCs are funding a concert business as a hedge against AI

Pier Play by RASA at the Santa Monica Pier earlier this year. Courtesy of RASA RASA is a concert business for and by tech people, hosting an festival this weekend in Santa Monica. It has raised more than $8 million from VCs who see IRL experiences as a hedge against AI. RASA's founder wants it to become the "Palantir" of the concert business. As most VCs pour billions into AI startups, a select few are making a counterbet on a traditionally low-tech business: Concerts. They figure the more life moves onto screens, the more valuable it will become to get people off them. "Real life experiences are the ultimate hedge against AI," said Paul Martino, managing partner at Bullpen Capital. "The place you're going to escape from AI is a concert." Martino is one of around a dozen VCs who have invested around $9.5 million into a Los Angeles-based startup RASA World, which produces electronic dance music festivals and live events around the globe. Earlier this month, it hosted an EDM festival for 3,000 people on the San Francisco waterfront. This weekend, it is holding a two-day festival on the Santa Monica pier featuring DJs Arodes and Claptone, with an expected crowd of 8,000 people. Founded in 2023 by three serial tech entrepreneurs, RASA is decidedly for tech people, by tech people. Rather than spend money on expensive acts, the company has used its capital to hire engineers and data specialists to build what cofounder and CEO Ahmad Muhaisen described as an internal "super tool" to combine the data from ticketing, social interactions, and attendance. Part of RASA's appeal to VCs is that the founders speak in the lingua franca of venture-backed software. Muhaisen said investors often arrive expecting to meet a slick "nightlife promoter" only to be pleasantly surprised when he throws around terms like customer-acquisition cost, lifetime value, and scalable distribution. "Suddenly they meet us, and they're like, 'Wait, you're tech founders,'" he said. Pier Play by RASA at the Santa Monica Pier earlier this year. Amandala Photography Muhaisen grew up in Lebanon where he studied computer engineering. After moving to the US, he cofounded a fintech company but left in 2022 to build a business around the gatherings he had been throwing in San Francisco. "These events started with 50 people in my house," Muhaisen said. "Suddenly, there are a thousand people showing up and renting beautiful venues." Muhaisen wants RASA to become the "Palantir" of the concert business: an intelligence layer that gives an event producer a much more detailed picture of its customers, their social ties, and what draws them back. Muhaisen said the company is looking beyond the traditional nightlife metric of who spends the most money. More important is someone who brings the most friends. "We know in our system the top thousand people who are responsible for inviting 20,000 people," Muhaisen said. The company can then reward those people with free tickets and upgrades. Muhaisen likes to use the word "experience," and emphasizes scenic (and Instagram-friendly) settings rather than headlining DJs. This is not Coachella. Anyone looking for Tiesto or Calvin Harris will be disappointed. "If you're going after bigger and bigger names, the margins suffer because it's a finite group of talent that everyone is fighting for," he explains. In keeping with Silicon Valley's sober kick, you will also be disappointed if you're looking for bottle service and rounds of shots. "If a person has fun at our events without drinking, then we know it's a good event," Muhaisen said. RASA takes some inspiration from Burning Man, which has attracted tech elites for decades. But as the demographic of that event gets older, RASA is trying to appeal to younger audiences who want something they can go to in the city on the weekend. "There are people who have not been to Burning Man, but want that community feel," said Semil Shah, a general partner at Haystack Ventures, which backed RASA. "They don't want to go out into the woods or the desert for days or weeks. They want to have a more contained experience." Over the summer, Bullpen Capital's Martino went to a RASA concert hoping to get a quick escape from conversations about AI, which dominate tech circles these days. He did not quite succeed. "It is funny to go to a RASA event and see some of the biggest tech cheerleaders talking about AI," he said, adding he was eventually relieved to see them take at least a momentary break to just focus on dancing. "Thank God we got them away from their AI for 25 minutes," he said. Read the original article on Business Insider

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