Amie Street, the online music store best known for its innovative dynamic pricing of songs, has revealed a $3.9 million second round of funding. The company has been raising the round for about a year, and inked a regulatory filing on Sept. 30, with a formal announcement expected today. Menlo Park, Calif.-based digital media specialist Deep Fork Capital was the lead investor, converting a note from an existing bridge round and supplying additional equity capital. The identities of three additional investors were not disclosed.
Although many valuations for digital music companies have fallen drastically in recent months as investors have given up hope of seeing significant returns, Amie Street co-founder Joshua Boltuch told me the current funding was “not a down round” compared with its Series A, completed in 2007. First-round participant Amazon.com was “not a major part” of the Series B, Boltuch added, although it continues to hold a stake as well as a seat on the company’s board. The current round remains open to new investors.
Amie Street’s dynamic pricing model introduces new songs as free downloads, then raises the price as they are downloaded more frequently. The site has primarily been a distribution channel for independent labels and artists, but Sony Music became the first major label to add its content to Amie Street’s store — albeit at fixed prices rather than flexible ones.
Amie Street acquired music search engine Songza in October 2008 for an undisclosed amount. Boltuch said the company will use some of the new funds to develop an Internet radio product around Songza’s technology.