Shazam has officially received a new round of funding to the tune of $20 million from undisclosed investors, bringing the song-tagging mobile app's total value to half a billion dollars.
Rumors that the company was pursuing such a transaction back in February surfaced around the same time Warner Music and Shazam announced a strategic collaboration allowing Warner to access Shazam's proprietary music data and use it to find and sign up-and-coming artists. One of the most noteworthy terms of the deal was that Warner would create a Shazam-branded label, sharing with its partner revenue from music released by artists discovered through the service and signed to the label.
Though Shazam has not stipulated how it will use the money, it is likely the company will funnel resources to its growing TV advertising efforts, especially after partnering with late-night host Jimmy Kimmel in the fall of last year. Viewers who used Shazam during "Jimmy Kimmel Live" could access free track downloads from musicians like the Lumineers, highlighting the service's relevance to TV as well as music.
This funding round follows last year's announcement that Shazam was the recipient of $40 million from Carlos Slim's Mexican telecommunications company , although that exchange appeared to be more about strategy than the money itself. "The reality is we have a very strong balance sheet and we didn't necessarily need to do a fund raise. We've actually preserved a lot of the cash we raised in the last round," said Shazam executive chairman Andrew Fisher. Rather, Slim's widespread and influential reach in Latin America dovetailed with Shazam's increased focus on expanding its services in North America.
Since its founding in 1999, the London-based company -- which also generates revenue by capturing referral fees for sending its app users to Amazon, iTunes or elsewhere to purchase songs they've just identified -- has raised $120 million. Besides América Móvil, Kleiner Perkins Caulfield & Byers led a $32 million round of funding in 2011. Previous investors in Shazam include DN Capital.