Not content just being a musical artist, the Norwegian deejay and 30 under 30 alumnus has raised millions to build the Margaritaville of dance music—with a little help from the 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, whose birth name is 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 Kygo, 31, weaves through MSG’s maze of corridors and into a nondescript dressing room where friends and family await.
Since 2014, Kygo’s played more than 350 concerts and festivals across the globe, but tonight is his first show at the iconic New York venue. He’s gathered his inner circle to celebrate. His parents and younger brother flew eleven-hours from his hometown of Bergen Norway to be here. Then there is the rest of the group, which would look at home at VIP Davos cocktail party. Filling the white-walled room, bare but for a framed photo of Elvis Presley, is 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 the $75 billion in assets Tiger Global Management.
“It’s obviously a good way to network, to invite people to my show and get to know them,” says Kygo. “But this is a moment I wanted to share with my friends.”
Soon the whole group—hedge fund billionaire and all—load into a fleet of black minivans and are ferried to Chelsea’s Moxy Hotel where they continue the party in a private lounge on the 35th floor with 360 degree views of the city and Kygo-themed cocktails.
For the soft spoken Norwegian, who earned an estimated $6 million in 2022, tonight’s bash is business and pleasure. Kygo, who debuted on the 2017 Forbes Under 30 Europe list at age 25, is harnessing his world-wide fanbase, tropical techno sound, and high-powered fans turned friends to grow his music juggernaut (his albums have 5 billion total streams, according to data tracker Luminate, with some 30 million monthly listeners on Spotify alone) into a global consumer brand—Jimmy Buffett’s Margaritaville for the Gen Z crowd. In 2020, with long-time manager Myles Shear, he launched Palm Tree Crew, a beach-themed brand that will launch destination festivals, clothing and restaurants. And they’ve taken a page from another Buffett—Warren—and raised $65 million from investors for a venture capital arm which invests in crypto and consumer product start-ups (Poppi soda and Daring Foods, a plant-based meat company) they think pair well with the Palm Tree Crew community.
“We figured instead of going to different places, playing different festivals, why not make our festival where we can book our own artists, people that we like. And we can also control what products are being sold at the festival, the whole experience,” says Kygo, who along with Shear and their third cofounder Austin Criden, owns 90% of the business; the DJ has a majority stake. “I can make sure that the experience is top-notch… I feel like it’s kind of a win, win situation.”
The roots of Palm Tree Crew can be traced to a Jimmy Buffett concert that the singer invited Shear to attend several years ago. “I see 40,000 people tailgating outside ready for 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 his manager. “I’m just like this is insane. Why are more artists not doing that?” Buffett–whose “island living” empire includes dozens of hotels, resorts, restaurants and even a cruise line–was Palm Tree Crew’s inspiration, and first investor (Buffett said he can’t remember exactly but it was around $50,000).
Tim Tadder for Forbes
“It was a whole other 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 of “controlling our own destiny” instead of leaving it up to the music industry. “Those guys knew that it’s not all party, rock’n and roll and have a good time. You’ve got to take care of business.”
That alternative attitude may come from Kygo’s unique introduction to stardom. The Norwegian native was a business student in Edinburgh, Scotland, when he started uploading remixes of popular songs he was making in his free time to the streaming site Soundcloud. His breakout hits included laid back, tropical-sounding takes on the Marvin Gaye classic “Sexual Healing” and Ed Sheeran’s “I See Fire.” Fans were immediately hooked on his then-novel use of steel drums and pan flutes to give these songs a new life and transport listeners beach-side.
Kygo started hosting intimate Palm Tree Crew Festivals in 2021—the first at the Francis S. Gabreski Airport at tony Westhampton Beach with Kygo and fellow EDM artist Zed as headliners. Because of Covid-19 restrictions, only 3,000 people could attend, but the crowd more than doubled this summer (Buffett was a special guest) and grossed some $2.5 million, according to Palm Tree Crew. Tickets ranged from $225 to $50,000 for an “on-stage package” that gave twenty guests backstage access and a luxury suite. Kygo’s also hosted two Palm Tree Music Festival “Getaways,” five-day festivals held in Cabo San Lucas, Mexico and on Croatia’s Pag Island, attended by 1,500 and 2,500 people, respectively. Part concert, part vacation, the multi-day events cost anywhere from $600 to $1000s 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 shopping. What Palm Tree Crew is really good at is selling the celebrity lifestyle: If you have the money, you can live and party like 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 event production agencies to build the events and handle the bookkeeping—for a 50% cut of the profits. They are planning to host 12 more in the next year in places like St. Barths, Australia and London before crowds ranging from 3,500 to 30,000 people, which they estimate will bring in a minimum of $10 million in gross income; tickets prices range from $85 to $1,000s. Their current licensing partnerships last through 2023.
On the investing side, Kygo and Shear started 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 CEO of the brand. The funding came from “high net worth individuals and family offices,” says Criden, who declined to give names aside from businessman David Adelman, who recently bought a stake in the Philadelphia 76ers and New Jersey Devils. Criden said Palm Tree Crew Hold Co. (which charges LPs the traditional 2% fees and a 20% carry on future profits) acts as a strategic partner linking brands, Kygos millions of fans, and the fund’s high powered investors. “We are a celebrity slash strategic fund because we are Palm Tree Crew and Kygo and we have this crazy network of celebrities and special individuals who follow us in the deals, but then we also have this massively strategic LP base, which consists of some of the most powerful and influential people in the world,” said Criden.
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’ve invested in are stocked at PTC’s events. “We were introduced to Palm Tree Crew and they’ve been great at integrating us into festivals,” said Poppi cofounder Allison Ellsworth, who noted that Palm Tree Crew invested in July 2021 as part of a strategic funding round that drew in a number of other celebrities, including singer Halsey, TikToker Bryce Hall and electronic duo The Chainsmokers. There is also a $25 million crypto fund, managed by Shear’s brother Brett—which may need more than palm trees to withstand the ongoing tough crypto winter.
Crypto ice age aside, Kygo’s 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, the director of music business at New York University’s Steinhardt school, likes what he hears. “There have been dozens of really successful music acts over the last decade that have done brand extensions or created entirely new brands in say one category,” said Miller, listing off singer -turned-billionaire Rihanna’s estimated $2.8 billion Fenty Beauty cosmetics businesses as an example. “But there are none that I can think of that have aggressively gone after the idea of building a brand that has the potential to become an entire 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: “Everybody thinks this is all easy because it looks fun.” Kygo now finds himself in a billion-dollar balancing act. The DJ loves making music for millions, but loathes the fame—the key ingredient in any celeb-driven business. Early on in his rise, the Norwegian tried to keep away from the spotlight, while Shear was openly pushing to make Kygo “the most famous person in the world.” Says Kygo “I wanted my music to be well known and famous but I didn’t want my face to be famous… I quickly understood that wasn’t possible.”
Kygo is clear that Shear is the main driver behind Palm Tree Crew—”he’s always had a bigger vision with everything.” Still Kygo is protective of his name. “No one can do anything without me saying yes. Even though they’re pushing me… I always have the final say and I think every artist should have the final say.”
His ultimate hope is that Palm Tree Crew will grow to be a self-sufficient business that isn’t overly reliant on his face. Instead of performing at every festival, he could design the lineups—and focus on creating. “At the end of the day I just care about whether it was a good song or not. I’ve always just been in it for the music.”