How Palm Tree Crew is building a lifestyle brand

The global music event industry is both lucrative (it’s estimated to hit $775.7 billion by 2035) and competitive. Festivals have become a culturally significant segment of this space, with major institutions like EDC Las Vegas and, of course, Coachella, reigning in the societal lexicon. Palm Tree Crew (PTC), founded in 2020 by DJ and producer Kygo and his manager Myles Shear, has slowly been breaking through the noise by taking an unconventional approach.

What began as an intimate music series in New York’s upscale Hamptons region has evolved into a holistic lifestyle ecosystem. In addition to its global slate of festivals—from Oahu, Hawaii, and West Palm Beach, Florida, to St. Tropez and Sardinia—Palm Tree Crew runs several brick-and-mortar locations across the US, has a merchandise deal with Centric Brands, and invests in early-stage brands through its Palm Tree Crew Holdings investments arm.

“One of the original inspirations and North Stars for Palm Tree Crew was Margaritaville and what Jimmy Buffett built over many decades,” said Michael Diaz, CEO of Palm Tree Crew Holdings. “Different customer between Margaritaville and Palm Tree, but [it’s] this thesis that you could build a lifestyle brand initially around an artist and then over time around a global community.”

Location, location, location

Diaz said Palm Tree chooses festival locations where it sees an “opportunity for a high-end experience within a high-end lifestyle market,” which have typically been vacation destinations like Aspen, Colorado, and St. Barths.

“When we think about the value that a Palm Tree Music Festival can bring to a market, part of it is functioning as an economy booster to already great markets that are doing well, but growing very significantly,” he said.

According to Diaz, the Aspen festival, which took place this year on Feb. 21 and 22, “drives the most economic impact to the town of Aspen throughout the calendar year,” measured through revenue generated by local hotels, restaurants, and other hospitality services.

“Palm Tree Crew is one of the brands who’s starting to do more of this lifestyle festival approach where it’s built for intimacy and at that crossroads of community and culture and commerce,” said Cimin Cohen, founder and CEO of ad agency Idea Peddler.

Cohen suggests Palm Tree Crew is creating a cultural alignment within the brand where customers know what they are going to get ahead of time. 

“By having smaller, more intimate festivals, they already have the community built…It’s really mirroring what we’re seeing happening in our social feeds; you’re building this bubble of the algorithm of, ‘I’m only going to see and hear the world according to how I see and hear the world,’” said Cohen. 

This intimacy is further demonstrated by PTC’s festival lineups, which tend to showcase a handful of performers in fewer genres, compared to the expansive programming of larger festivals like Governor’s Ball or Austin City Limits.

Keeping the good times rolling

In September, Palm Tree Crew raised $20 million in a Series B, bringing its valuation to $215 million. Progress at the company seems to exist within various different channels: In late 2024, it opened its first year-round brick-and-mortar location, Palm Tree Club, in Orlando, Florida, which was followed soon after by another restaurant-nightclub in Miami.

“What the brick-and-mortar venues allow us to do is to take the experience across music, culture, entertainment, and hospitality that the customers and fans get at the pop-up shows and deliver it 365,” Diaz said.

PTC has expanded its brick-and-mortar presence to Las Vegas and Kansas City, Missouri. Last year, it acquired a stake in Palm Beach-based cocktail lounge Mary Lou’s, and has helped facilitate its expansion to Miami and Montauk, New York.

“It’s a good example of a hospitality concept that is different from what Palm Tree produces through our brick and mortar, but it’s very complementary to the overall portfolio that we have,” Diaz said.

Investing in a lifestyle

Palm Tree Crew has also opted to invest in early-stage brands to help these companies grow and create a full experience for Palm Tree customers.

“We see the VC practice as a way to leverage the platform we have to grow brands, that then accrues value for Palm Tree Crew investors and creates another lever to grow the pie outside of the PNLs of the core businesses,” Diaz said.

Palm Tree Crew Holdings invests across food and beverage, and hospitality and entertainment brands, including prebiotic soda Poppi, delivery service Gopuff, and hair care brand Crown Affair. According to Diaz, one of the core components of its investment strategy is to identify a “world-class founder” or a company that fills a “white space in a certain vertical or a certain category that hasn’t been disrupted.”

“Festivals are expensive. It typically takes at least three years to turn any kind of a profit,” Cohen said. “The investment arm parlays into that horizontal mindset that they’re making revenue in a variety of ways and know that there’s not any one lever at any given time that’s going to be able to have this hyperbolic growth that people want to see in businesses.”