Apple is building up its music business with an acquisition of a small tech startup that helps discover and develop emerging musical artists.

Apple confirmed to CNBC it purchased Platoon, a company that helps independent artists fund, distribute, and market their content. The news was first reported by Music Business Worldwide. The terms of the deal were not disclosed. Platoon had about a dozen employees.

The deal could help Apple find and develop exclusive artists for Apple Music, helping it stand apart from competitor Spotify. The company is depending on growth in subscription services like Apple Music to offset flattening iPhone sales.

Unsigned artists may find it expensive to buy studio time and have access to music editing software. Many don't have the range of social media tools and access to data to get their music in front of audiences effectively. Platoon finds artists it believes will make it big, gets them on its service, funds them, and helps them get discovered by the public and bigger labels. In effect, it's like an indie music label.

Some of acts that have worked with Platoon include Billie Eilish, Stefflon Don, Mr. Eazi and YEBBA.

The company was founded by former Skype executive Saul Klein, who also co-founded LoveFilm, and Denzyl Feigelson. Feigelson is a former music talent manager who founded direct-to-consumer record sales company Artists Without A Label, which focuses on selling music from independent artists. He also has worked with Apple on music projects in the past, including the iTunes Festival.

Apple's largest acquisition-to-date was in the music space. It acquired Beats Electronics for $3 billion in May 2014.