MediaFile

TodayInMusic: Rdio gets $17.5 mln funding, Warner exec on board

Niklas Zennstrom Skype

Rdio, the social media music service backed by the founders of KaZaa and Skype, has raised another $17.5 million in its latest round of funding.

Its latest backer is Mangrove Capital Partners, who inadvertently broke this story over the weekend via Twitter. The start-up’s earlier funding was provided by Rdio co-founder Janus Friis through his investment entities as well as Atomico  and Skype. Atomico is the VC firm from Niklas Zennstrom (pictured) who was Janus’ partner in Skype and KaZaa, the music file sharing service. Currently available only in US North America., it’s going to use the new funds to expand its footprint to new platforms and countries this year.

Rdio’s service allows you to automatically share the music you’re listening to and discover new music through people you follow. It’s kind of what iTunes and Ping are trying to do but few think they’ve achieved.

Also interesting from Rdio is the fact they’ve added Warner Bros Records Chairman Rob Cavallo to its board. Cavallo, who only joined Warner Music in 2009, is best known as a producer of acts like Green Day, Dave Matthews Band and Alanis Morissette.

You might think that with all the troubles in the music industry investors might be staying away. Not according to Digital Music News, which estimates here that $33.8 millionhas already been committed to music-based start-ups this year including Rdio.

For Web startups, 2011 kicks off with flood of funding

MARKETS-KOREA-FOREX/The East Coast has been buried in copious amounts of snow this winter. In Silicon Valley, the only thing falling from the sky seems to be money.

If the first couple of weeks of the new year are any indication, Web startups appear to be awash in cash, with every day bringing one or more high-profile funding announcements.

The latest company to join the fund-raising parade is Formspring, which announced Wednesday it has raised $11.5 million in a round led by Redpoint Ventures. The San Francisco online social networking service, which has garnered more than 20 million registered users since launching 14 months ago, actually raised the money late last year, but had not disclosed the round until now, CEO Ade Olonoh told Reuters.

Newly funded Echo Nest tells music industry: “It’s the data, stupid”

Echo Nest Parakeet

Of the many ways the traditional music industry has struggled in the fast evolving digital music world has been understanding who is listening, why they’re listening , when and where they’re listening and find ways to build music-based products and services around that — especially since not as many people are buying music as they used to.

This is where The Echo Nest comes in. A start-up based in Somerville, Massachusetts is a self-described music intelligence company that powers music applications and services for developers and media companies based on data that it is automatically collates from millions of songs and music articles around the Web.

Chief Executive Jim Lucchese, a former music lawyer, compares one element of Echo Nest’s offering to the ever popular Pandora whose Music Genome Project indexed over 800,000 songs in a major labor of love which involved hundreds of musicians/analysts. He says Echo Nest’s technology is able to index millions of songs on any number of criteria in seconds.

from Summit Notebook:

VC’s Lament: the ones that got away

Vic Gundotra, Vice President of engineering at Google (R) and Omar Hamoui, founder and CEO of AdMob converse during the "Mobile: Where's The Money Going?" panel at the Fortune Tech Brainstorm 2009 in Pasadena, California July 23, 2009. REUTERS/Fred Prouser
Whether it’s passing up on a ticket to Woodstock or not buying Apple stock at $80 a share in January 2009, everybody has regrets.

So what do VCs regret?

We asked the panel of three money-men gathered for the VC Panel at the Reuters Technology Summit for their biggest laments when it comes to the deals they let get away.

“For me the one that comes to mind is AdMob,” said Khosla Ventures partner David Weiden, referring to the mobile advertising firm that Google announced plans to acquire for $750 million in November.

Want an in with Kleiner? Send a drawing

For Matt Murphy, partner with influential Silicon Valley Venture fund Kleiner Perkins and point person on the firm’s iFund, old-school is still the way to go.

During an interview at the Reuters technology summit, the VC said picking the right startups to back was tough, given that he had received 8,000 business plans for iFund, which invests in iPhone and iPad applications.

The onslaught of business plans from app developers escalated to almost 500 per day when the fund expanded to $200 million in March.

Getty Images invests in Daylife, takes snapshot of business

As someone who only stopped using his 35 year-old Topcon camera when its shutter broke (irreparably), it was nice to have a phone interview with Getty Images Chief Executive Jonathan Klein on Monday.

Klein briefed us on an investment the stock photo and news photography company made in Daylife, a “news aggregator” that has been around a few years. The companies announced the investment on Wednesday. As Media Memo’s Peter Kafka described it:

Daylife formally launched in January 2007 with a good deal of buzz, due primarily to its high-profile investors, which included the New York Times (NYT), Craigslist founder Craig Newmark and Techcrunch’s Michael Arrington. The initial plan was to create both content-aggregation tools for publishers as well as a destination site, but the latter never took off and is now just a demo site for customers.

Facebook’s start-ups strut their stuff

Facebook opened its doors to venture capitalists on Tuesday.******The world’s largest social media company, which landed $200 million in funding in May, wasn’t trying to drum up any more cash for itself.******Instead, it was promoting a couple dozen start-up companies that leverage its technology and could further the strategy of making Facebook a key building block for Internet businesses and services.******The start-ups were selected by Facebook earlier this year through fbFund, a joint venture between Facebook, Accel and Founders Fund that provides seed funding (typically between $15,000 and $75,000 per start-up) to Facebook application developers.******The start-ups toiled through the summer in Facebook’s erstwhile Palo Alto, California headquarters and Tuesday was show-time: a chance to show off their progress and, they hoped, secure a more substantial chunk of funding from the VCs assembled.******Unlike traditional Facebook applications, such as games that run directly within the Facebook Web site, many of the products showcased on Tuesday were stand-alone Web sites that tap into a Web surfer’s network of Facebook friends using the Facebook Connect service.******Thread.com, an online dating site, allows people to cull through their Facebook friends’ friends, searching for say, single women in a certain age group, and to contact a prospective date via a trusted friend.******Another start-up, Sociable, provides a service that it said can boost sales for online retailers by integrating transactions with Facebook. The company said it was already generating revenue and that concert-promoter LiveNation is a customer.******According to Founders Fund’s Dave McClure, who organized Tuesday’s event, five fbFund companies are already break-even or profitable, and another three expect to get there by the end of the year – no small feat given the rough economy.******Facebook will need more such success stories as it seeks to transform its own company from the Web’s top social networking destination into the underlying social fabric of all Web sites.

from Commentaries:

Start-ups better off with angels than VCs

Self-financed angel investors are often found where venture capitalists fear to tread. They typically provide seed financing to start-ups that is counted in the thousands or tens of thousands instead of the millions VCs have to throw around.

A newly released academic study (52-page Acrobat file) finds angel investors also cut the start-ups they invest in better deals, both in early financing rounds and in cases where the company eventually makes its way to an initial public stock offering.

If our conjecture is correct, then an entrepreneur may be better off avoiding a venture capitalist altogether and going to an angel to obtain their financing.
....
While venture investors are prone to underprice IPO firms, reducing the
proceeds from the offering, angel investors have incentives more aligned with non-venture capital, pre-IPO shareholders.

Less and less funding for venture green shoots

VC fundrasing falls off cliff

Hard-pressed private equity firms complain a lot about the difficulties in making classic leveraged buyouts work. Some talk of elbowing in on early-stage investments of the sort which venture capital is known. They won’t have lots of competition from incumbents.

The latest data from the U.S.-based National Venture Capital Association shows new fundraising activity among venture capitalists falling off a cliff, with the lowest number of funds raising money — 25 — in 13 years and the smallest number of dollars committed — $1.7 billion — since 2003.

U.S. venture capital fundraising is now just 14 percent of recent peak levels in the fourth quarter of 2007, when 86 funds raised $12.3 billion. That was the year that $36 billion was ploughed into venture investments. This year, VC will be lucky to attract one-third of that amount.

from Entrepreneurial:

Young entrepreneurs to watch in the tech sector

Bill Gates was 19 when he came up with the idea for Microsoft. Michael Dell was the same age when he started selling computers out of his dorm room. Who are the teenagers and 20-somethings trying to hatch the big tech and media ideas of tomorrow?

paidContent.org has compiled a list of likely candidates under the age of 21, from web design impresarios to "pimp my MySpace" tycoons.  Taking advantage of the Web's low barriers to entry means that you often only need a really good idea. catherinecook_woCatherine Cook

Age: 19
Company: myYearbook

Some great ideas come from analysis and introspection. For siblings Catherine and David Cook, it was the result of a snarky comment. “My brother David and I were flipping through our high-school yearbook during my freshman year,” Catherine recalls. “We were looking for a girl in his class—I think he liked her—and he was trying to show me who she was. Once we finally got to the picture he was like, ‘She looks nothing like that.’”