Inside DJ Kygo’s Quest To Become The Gen-Z Jimmy Buffett

Not content with being a musical artist, the Norwegian disc jockey and 30 Under 30 alumnus has raised millions to build the Margaritaville of dance music, with a little help from Chief Parrot Head himself.

It’s a Thursday night in October in New York City, and Kygo, one of the world’s most famous DJs, takes the stage at Madison Square Garden to the cheers of 21,000 fans. For the next two hours, Kygo, birth name Kyrre Gørvell-Dahll, rocks the sold-out crowd with his brand of tropical EDM music as lasers, smoke machines and fireworks fill the arena. The lights go down and 31-year-old Kygo makes his way through the maze of MSG hallways, arriving at a nondescript dressing room where friends and family await him.

Since 2014, Kygo has played over 350 concerts and festivals around the world, but tonight is his first show at the iconic New York venue. He has gathered his inner circle to celebrate. Her parents and her younger brother flew eleven hours from their hometown of Bergen, Norway, to be here. Then there’s the rest of the group, who would look right at home at the Davos VIP cocktail party. Filling the white-walled room, empty except for a framed photo of Elvis Presley, are fellow musician Martin Garrix, New York Jets wide receiver Braxton Berrios, oil heir Mike Hess and hedge fund mogul Chase. Coleman, III, the founder of $75 billion in assets Tiger Global Management.

“Obviously it’s a good way to network, invite people to my show and get to know them,” says Kygo. “But this is a moment I wanted to share with my friends.”

Photo by Tim Tadder for Forbes

Soon the entire group (hedge fund billionaire and all) hops into a fleet of black minivans and is transported to Chelsea’s Moxy Hotel, where they continue the party in a private 35th-floor lounge with 360 views. degrees from the city and Kygo-themed cocktails. .

For the soft-spoken Norwegian, who earned an estimated $6 million in 2022, tonight’s party is about business and pleasure. Debuting on the 2017 Forbes Under 30 Europe list at age 25, Kygo is leveraging his worldwide fanbase, tropical techno sound, and high-powered fans-turned-friends to grow his musical giant (his albums have 5 billion total streams, according to data tracker Luminate, with some 30 million monthly listeners on Spotify alone) on a global consumer brand: Jimmy Buffett’s Margaritaville for the Gen Z crowd. In 2020, along with his former manager Myles Shear, launched Palm Tree Crew, a beach-themed brand that will launch festivals, apparel and dining in destinations. And they took a page from another Buffett, Warren, and raised $65 million from investors for a venture capital arm that invests in crypto and consumer products startups (Poppi soda and Daring Foods, a plant-based meat company ) that they think blends well with the Palm Tree Crew community.

“We thought instead of going to different places, playing different festivals, why not do our festival where we can book our own artists, the people we like? And we can also control what products are sold at the festival, the whole experience,” says Kygo, who along with Shear and his third co-founder, Austin Criden, own 90% of the business; the DJ has a majority stake. “I can make sure the experience is top notch… I feel like it’s a win-win situation.”

The Palm Tree Crew’s roots go back to a Jimmy Buffett concert that the singer invited Shear to attend several years ago. “I see 40,000 people outside ready for the doors to open. Once I get in, Buffett has his own tequila, his own merchandise,” says Shear, who was a 20-year-old college student when he first heard Kygo’s music and convinced him to become Kygo’s manager. the. “I’m like this is crazy. Why don’t more artists do that? Buffett, whose “island life” empire includes dozens of hotels, resorts, restaurants and even a cruise line, was the inspiration and early investor for the Palm Tree Crew (Buffett said he can’t remember exactly, but it was around $50,000). ).

“It was a completely different line of music for me, but it was also interesting because tropical house was close to what I was doing,” Buffett told Forbes. He liked Kygo’s desire to “control our own destiny” instead of leaving it up to the music industry. “Those guys knew that it’s not all party, rock and roll and having a good time. You have to take care of business.”

That alternative attitude may come from Kygo’s unique introduction to stardom. The Norway native was a business student in Edinburgh, Scotland, when he began uploading remixes of popular songs that he was making in his spare time to the streaming site Soundcloud. His biggest hits included laid-back, tropical-sounding versions of the Marvin Gaye classic “Sexual Healing” and Ed Sheeran’s “I See Fire.” Fans were immediately hooked with his then novel use of steel drums and panpipes to breathe new life into these songs and transport listeners to the beach.

Kygo began hosting intimate Palm Tree Crew festivals in 2021, his first at the Francis S. Gabreski Airport in Tony Westhampton Beach with Kygo and fellow EDM artist Zed headlining. Due to Covid-19 restrictions, only 3,000 people were able to attend, but crowds more than doubled this summer (Buffett was a special guest) and grossed about $2.5 million, according to Palm Tree Crew. Tickets ranged from $225 to $50,000 for an “onstage package” that gave twenty guests backstage access and a luxury suite. Kygo’s also hosted two Palm Tree Music Festival “Escapes”, five-day festivals held in Cabo San Lucas, Mexico and on the island of Pag in Croatia, attended by 1,500 and 2,500 people, respectively. Part concert, part vacation, multi-day events cost anywhere from $600 to $1000 per guest and mix sets from more than a dozen artists (many of whom are friends with Kygo) with pool parties, club nights, and exclusive purchases. What Palm Tree Crew is really good at is selling the celebrity lifestyle: if you have the money, you can live and party as an international DJ for a few days.

To manage the significant upfront costs of starting a festival business, Palm Tree Crew uses a licensing model, partnering with event production agencies to build the events and handle the accounting, for a 50% cut of profits. They are planning to host 12 more next year in places like St. Barths, Australia, and London to crowds ranging from 3,500 to 30,000, which they estimate will generate a minimum of $10 million in grosses; ticket prices range from $85 to $1,000s. Their current licensing associations last through 2023.

As for investments, Kygo and Shear founded the Palm Tree Crew Hold Co., in 2020. It’s run by Shear’s childhood friend and former investment banker Austin Criden, who also serves as the brand’s CEO. The funding came from “high net worth individuals and family offices,” says Criden, who declined to name names other than businessman David Adelman, who recently bought a stake in the Philadelphia 76ers and New Jersey Devils. Criden said the Palm Tree Crew Hold Co. (which charges LPs the traditional 2% fees and 20% of future profits) acts as a strategic partner linking the brands, the millions of Kygos fans and Kygos investors. high background power. “We are a strategic celebrity reduction fund because we are the Palm Tree Crew and Kygo and we have this crazy network of celebrities and special individuals that follow us on deals, but we also have this massively strategic LP base, which consists of some of the people most powerful and influential in the world,” Criden said.

The Miami-based investment firm has backed 23 companies with an average investment of $6 million each, according to Pitchbook. Many of the products they have invested in are stored in PTC events. “They introduced us to Palm Tree Crew and they’ve been great at integrating us into festivals,” said Poppi co-founder Allison Ellsworth, noting that Palm Tree Crew invested in July 2021 as part of a strategic funding round that attracted several other companies. celebrities including singer Halsey, TikToker Bryce Hall, and electronic duo The Chainsmokers. There’s also a $25 million crypto fund, run by Shear’s brother Brett, that may need more than palm trees to weather the ongoing harsh crypto winter.

Crypto ice age aside, the Kygo team has lofty goals of opening Palm Tree Crew restaurants in Miami, hotels in Norway, beach clubs in Ibiza, maybe even an airline. So far, it’s just noise. But Larry Miller, director of music business at New York University’s Steinhardt School, likes what he hears. “There have been dozens of really successful musical acts over the last decade that have done brand extensions or created entirely new brands in, let’s say, a category,” said Miller, listing singer-turned-billionaire Rihanna’s Fenty Beauty cosmetics businesses, estimated at 2.8 billion dollars, as an example. “But I can’t think of one that has aggressively pursued the idea of ​​building a brand that has the potential to become a complete integrated ecosystem, which is what Margaritaville is…and what PTC is on its way to becoming.”

Building ecosystems is far from simple. Just ask Buffett: “Everyone thinks all this is easy because it sounds like fun.” Kygo now finds himself in a billion dollar balancing act. The DJ loves to make music for millions, but he hates fame, the key ingredient in any celebrity-driven business. Early in his rise, the Norwegian tried to stay out of the limelight, while Shear openly lobbied to make Kygo “the most famous person in the world.” Says Kygo, “I wanted my music to be known and famous, but I didn’t want my face to be famous… I quickly realized that wasn’t possible.”

Kygo is clear that Shear is the main driver behind the Palm Tree Crew: “He’s always had a bigger vision with everything.” Still, Kygo protects his name. “No one can do anything without me saying yes. Even though they pressure me… I always have the last word and I think all artists should have the last word.”

His last hope is for the Palm Tree Crew to become a self-sufficient business that doesn’t rely too much on his face. Instead of performing at all the festivals, he could design the lineups and focus on creating. “At the end of the day, I only care if it was a good song or not. I’ve always been in it for the music.”


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