German music service Simfy has raised €10 million (US $14.2 million) of funding from previous backers Earlybird, NRW Bank, Dumont Venture and Klaus Wecken. In a press release, CEO Gerrit Schumann says the funding will help it expand into other markets. Simfy is currently available in Germany, Austria and Switzerland. The company has raised a total of €18 million (about $25.6 million dollars), a company spokesperson tells Billboard.
While cloud music services face market uncertainty, investors clearly believe they are worthwhile investments. Streaming services like Simfy have raised an incredible amount of money in the last 18 months or so. Other than Simfy's new €10 million round of funding, recent funding rounds include $77 million raised by Beyond Oblivion, $17.5 million raised by Rdio, $9.5 raised by MOG, $2.5 million raised by Slacker and $9.6 million raised by Deezer. In addition, Spotify and Pandora were reported to have raised undisclosed sums during that time span. Livio, a maker of Internet radio products, is also reported to have raised VC money in the last 18 months.
In spite of investor enthusiasm, subscription services don't yet have the numbers to support big valuations. According to the RIAA, U.S. paid subscription services had 1.5 million customers at the end of 2010, up from 1.2 million at the end of 2009. But there a few signs of encouraging growth. Simfy has over one million registered users and says it monthly growth in users is in the "high double digit" range (the company has not said what percentage of its users are premium customers). And Spotify has amassed ten million registered users and one million paying subscribers in its seven European markets.
Launched in May 2010, Simfy is Germany's largest music streaming site. It has over eight million songs and allows users to listen to music, create playlists and engage with other users. The service is available on the web, via a desktop app and through mobile apps for iPhone and Android.
Simfy has both free and paid levels of service. The ad-supported, free level offers playlist creation and sharing, radio features and editorial recommendations. The premium level of service costs €9.99 (US $14.23) per month and includes access to mobile apps and the ability to play music from any territory.
But controversy seems to have missed Simfy almost entirely. Its freemium model (a free service that encourages users to upgrade to the premium service) has not raised the same concerns as that of Spotify - even though they have very similar models. But there is one piece of evidence that rights owners are hesitant to give too much away to free users: Warner Musis has held back some titles from free users and made them available only to premium users ("artists like Madonna, Eric Clapton, Peter Fox, etc.").