Songza Raises $3.8 Million in Fresh Funding
Internet radio service Songza has raised $3.8 million in fresh funding, according to an SEC filing. The news was first reported by TechCrunch. When reached by Billboard, Songza did not comment on the round or how it plans to use the funding.
The team that founded and sold Amie Street, the music download store that was acquired by Amazon.com in 2010, later created Songza. The company has taken a different path than Pandora and similar services that create a personalized listening experience with algorithms. Songza creates themed playlists and allows people to choose music based on mood or activity. Its "Music Concierge" feature guides the listener to playlists deemed suitable for everything from doing housework to entertaining friends. Clear Channel copied the Concierge when it launched a similar feature called "Perfect For" in January.
Although it's a small player in a large market, Songza has made an impact. In June, Songza's strong numbers adversely impacted Pandora stocks, which dropped 11.2 percent over two trading days, shedding about $208 million of market value after BTIG analyst Richard Greenfield warned in a blog post that Pandora investors should be worried by the sudden rise of Songza. The last active listener figure the company gave was 2 million in July. CEO/co-founder Elias Roman told Billboard in October that number had "grown significantly since then."
In August, Songza raised $1.5 million through a convertible note led by Amazon.com, Deep Fork Capital and Metamorphic Ventures. That round's other investors included Troy Carter, William Morris Endeavor and NBA star Baron Davis. The company has 27 investors through the most recent funding round, according to the SEC filing.
Although digital music has a reputation for scaring off investors, numerous Internet radio companies have raised funding in recent years. In 2011, Pandora had an initial stock offering, while Earbits and Radical.fm each raised funding. Senzari has raised $3 million since 2011, according to reports. TuneIn, which aggregates various Internet radio streams, raised $16 million in August. Large companies are also heavily involved. Apple is expected to launch an Internet radio service in the summer.