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Rdio: Funded To The Tune Of $17.5 Million; Warner Records’ Cavallo On Board

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Last week we wrote about how social music service Rdio was picking up a round of funding from Mangrove Capital Partners. Today the company officially announced the news. It’s a $17.5 million investment in a round being led by Mangrove. Rdio has also added a music industry heavyweight to its board, Rob Cavallo, chairman of Warner Bros. (NYSE: TWX) Records.

Cavallo, notes the release, is a Grammy-nominated producer known for his work with Green Day, the Dave Matthews Band and Alanis Morissette. He will join existing board members Mark Dyne, CEO of Europlay Capital Advisors; Skype/Kazaa/Joost founders Janus Friis and Niklas Zennstrom, who also co-founded Rdio and invested in it through their Atomico venture, and Rdio CEO Drew Larner.

Rdio’s says that Cavallo will help “further strengthen Rdio’s relationship with the music industry.” Given that Rdio already has deals with all the major record labels such as Sony (NYSE: SNE), EMI, Warner Music Group (NYSE: WMG) and Universal, as well as many indepedent labels, Cavallo’s role may be more about figuring out ways of further monetising those existing relationships through new services, than about getting more licensing deals.

The startup has already done a bit of business in this area, linking up with third parties to develop music experiences, for example powering the music behind the Grammy Awards’ MusicMapper service.

Rdio says it will use the $17.5 million investment to “aggressively” expand into new regions — the service is currently only available in the U.S. and Canada — and new platforms. Currently the service works as an app on iPhone, Android and BlackBerry devices; on PCs; and consumer electronics devices, such as Sonos home audio equipment. Rdio is sold on a subscription basis, at $9.99 per month for the web/mobile edition and $4.99 per month for the web-only version.

Streamed music services are a big area right now, with companies like and Spotify and ventures from the labels themselves, such as Qriocity from Sony, also trying to get in on the action. Rdio having launched already in the U.S. is a crucial step in gaining market share — and mindshare — for its service.

Rdio was launhed in June 2010 with backing from Zennstrom’s and Friis’ own VC outfit Atomico Ventures.

Mangrove has been an investor in a number of European startups including Zennstrom’s and Friis’ earlier venture Skype (which is now also an investor in Rdio), buying clubs Brands4friends and KupiVIP, Nimbuzz and Jolicloud.