Songza Lands Investments from Troy Carter, William Morris Endeavor, Others
Internet radio service Songza announced some encouraging listener metrics Wednesday, but its new celebrity investors will probably get more attention.
Songza announced Wednesday the close of a $1,500,000 convertible note led by Amazon.com, Deep Fork Capital and Metamorphic Ventures. The latter will join Songza's board of directors. The round had a long list of strategic partners, shortened here to include Troy Carter, William Morris Endeavor, 1-800 Flowers, NBA star Baron Davis, 24/7 Real Media co-founder Geoff Judge and Google Managing Director of U.S. Sales John McAteer. And Songza announced a lengthy list of additions to its board of advisors, including Mark Eisenberg (former EVP of Global Digital Business and Head of Business and Legal Affairs, Sony Music Entertainment) and artist manager Julius Erving Jr.
Its competitors will be more interested in the user metrics: over 2 million new users added in the U.S. and Canada (where it launched last week) since June 1 and 2 million unique US users served in July.
A few thoughts here:
First, Songza has conveniently put a number on the hype that's been surrounding it for the last few months. Its 2 million U.S. users in July (all its listeners) were just 3.6% as many as the 54.9 million listeners Pandora had that month. You're free to interpret those numbers as either a wide gulf between an incumbent and an upstart, or as proof of Pandora's supremacy.
Second, issuing convertible debt is something many startups don't do. Debt requires a cash outlaw for debt maintenance payments, and most startups try to conserve cash or simply don't have much cash. Thus, debt generally speaks to a relatively financial health of a young company. In contrast, a startup with no or limited cash flow can do nothing but give away equity for capital. Update: It's not really so black and white. As one executive emailed me to point out, debt financing it becoming more common with startups these days. It allows startups to get capital without setting a valuation early on in the company's history. That makes it easier and faster than equity financing.
Deezer's Global Reach Grows
-- Deezer has continued its international expansion with launches in Singapore, Thailand and Indonesia. Deezer can be accessed as a standalone service while Thai consumers can subscribe through a partnership with dtac, a Thai mobile network operator with 23.6 million subscribers.
The music subscription service, which boasts 1.5 million subscribers and 23 million users (it has both free and paying users), has continued its strategy of operating cost-effectively outside of the world's two largest music markets, the U.S and Japan (although Deezer might as well be avoiding Japan because it would have to build the subscription market from scratch).
Murder by Death Scores Kickstarter's Third-Biggest Project
-- Murder By Death now has Kickstarter's third-most-funded music project of all time. The Bloomington, Indiana-based band raised $187,048 from 2,618 backers to self-release the vinyl version of its upcoming Bloodshot Records release, "Bitter Drink, Bitter Moon." About $28,000 of the pledges will get downloads or CDs of either the new release or the band's first album. The remainder will get vinyl releases, test pressings, patches and other unique items for fans.
Eighteen pledges were $1,000 or more and 479 were $100 or more. Nothing here indicates Murder By Death used Kickstarter to fund the recording -- instead, the fundraising platform was used to finance the kind of well-crafted (and expensive) vinyl releases it wanted to make for its fans. Smart move. ( Murder by Death Kickstarter's page)