The label was founded in 2000 as a part of the Cocoon Music Event GmbH.

The company's other branches are Cocoon Booking (for Sven Väth, Ricardo Villalobos, Josh Wink etc. and Cocoon Clubbing, which organises club events as well as outdoor events and tours. Since July 2004, Cocoon also runs its own Club, located in Frankfurt, and being one of the most innovative club locations worldwide.

Sven founded Cocoon Recordings in order to complete the Cocoon platform as a supporting tool for young artists in Electronic Music. The label philosophy is as simple as demanding: helping young producers and DJs to release their music without depending on Major Label structures. The musical style of the releases is mainly Techno.