Beats Music has raised a second round of funding of aproximately $60 million, according to a source familiar with the deal. The money comes largely from current investors, including Jimmy Iovine, Dr. Dre and Access Industries with the cash being used to invest in product development, acquiring new customers and marketing.
The streaming service backed by Iovine and Dr. Dre first secured $60 million in funding in March of 2013 from Len Blavatnik's investment group, Access Industries (Warner Music's parent company) as well as Marc Rowan, James Packer and parties affiliated with Lee M. Bass.
A Beats Music spokesperson declined to comment. Bloomberg first reported the news, claiming the investment round was closer to $100 million dollars.
Beats Music launched to consumers in late January to much critical acclaim for its slick interface intuitive design, but music insiders indicate that it has yet to take off as the runaway success that was hoped given its founders previous track record with headphones and speakers.
It is expected that the new funding will be used to boost its advertising campaign beyond the AT&T co-branding spots — some of which featured comedienne Ellen Degeneres.
The report closely follows news that Beats' largest competitor Spotify obtained a $200 million credit facility in anticipation of a speculated IPO. In November of last year, Spotify raised $250 million in a funding round, placing it's valuation at around $4 billion.
Beats announced last week the acquisition of CEO Ian Rogers' former company, TopSpin Media, which provides tools to help artists market their bands and sell merchandise. Late last week, Spotify announced an acquisition of The Echo Nest, a data company that provides music recommendation for streaming music for companies such Rdio, Vevo and iHeartRadio. Sportify reportedly paid $100 million for The Echo Nest, according to TechCrunch.
Last year, Spotify reported having 6 million paying subscribers worldwide out of 30 million total listeners. It's U.S. subscriber base was recently estimated to have increased to two million.
Beats Music has not revealed how many users have signed up for it's service in the two months it's been available to the public. Beats launched without a fremium tier and AT&T as its exclusive carrier with individual service plans costing $9.99 a month or $14.99 a month for a family with up to five people and 10 devices and on-demand access.
Additional reporting by Yinka Adegoke and Andy Gensler.