Musicians struggling to make a financial success of the streaming revolution could also be losing out on $3.2 billion per year in unpaid royalties.

That’s the problem Ryan Edwards, CEO and founder of new start-up Audoo, is trying to solve with a device no bigger than a nightlight.

The 34-year old entrepreneur’s impressive tech career includes two and a half years as head of digital for Visa Europe and three years as commercial director of loyalty scheme start-up Bink.

But his time in tech was preceded by a brief stint as a drummer in UK indie band The Lines, during which time he managed a top-10 single with his bandmates.

The Lines with their 2007 song 'Domino Effect'

Despite his success, the band struggled to make ends meet, so it was a surprise to Edwards and his wife to happen upon his song being played in a department store. Curious about the revenue being generated by these plays, Edwards began to dig deeper.

“I was never paid, so I did some research to find out more,” he told BusinessCloud.

To his surprise, there was no concrete system to ensure that artists were paid when their music accompanied customers in a coffee shop or people working out at the gym.

“In theory when you pay for streaming services you're paying for a personal licence so they shouldn't be broadcasting that in a public space,” he said.

“The royalties societies who collect money on behalf of artists around the world have very little data and knowledge about what's being played.

“There is a lot of guess work happening in the industry.”

Edwards explained that the current system includes sending staff to monitor and record the music being played in commercial spaces. With the small sample they collect, it is up to these societies to redistribute the finances fairly.

Having worked in tech, Edwards knew a solution powered by tech was possible, and created Audoo. The company plans to work closely with UK performance royalty organisations such as PRS For Music and PPL which licence the music to public spaces.

When a licence comes up for renewal, Edwards’ plan is to send out one of Audoo’s devices, which plugs into a wall and listens for music in these spaces.

The start-up's cloud-based music recognition platform receives the recodings and compares the music to its database of 20 million songs, ensuring each artist gets paid.

“It's a very small fee which we're looking to take out of the licence that is collected, so we’re not taking money from artists but building into management costs to help reduce some of the manual labour,” he explained.

The start-up, which has been quietly building momentum, now has six staff and is in the middle of a £1.2m seed funding round, having successfully hit the 50 per cent mark in just under seven weeks. Investors include Edwards’ old employer, Bink founder Greg Gormley.

“There's nothing better than asking your old boss to invest in you and him saying yes. It's been a real personal success for me,” he said.

The start-up is planning a period of significant growth over the coming months, and is recruiting developers and engineers to take its headcount to 20. Edwards also has ambitions to take the tech internationally, with expansions into US and Australia.

Longer term, Edwards’ plan is to help the global music industry, worth in excess of $55bn, to pay artists more than the current 12 per cent they end up with.

“What I'll spend my time doing once we've grown this business and we're at a very solid and profitable point is to start to put back.

“When we build bigger offices and take bigger space I have a vision that we'll build a recording studio and we'll allow musicians to come in and use it – just any way that we can help the industry and remove some of the financial burden.”

On his lapsed musical career, Edwards has no plans to go back to touring, but is happy to lend a hand - or two - after his studio dreams are a reality.

“Maybe if it's a singer-songwriter and they need a drummer, I'll be able to lay down a beat!”