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Music-identification app Shazam is taking on a big $32 million funding round, as it aims to accelerate product development beyond its original proposition…
The money is led by existing backer Kleiner Perkins Caufield & Byers (KPCB) with Institutional Venture Partners (IVP); existing backer DN Capital also participates.
Shazam has been hitting all its user targets, with nearly 150 million registered users, four million tags per day and a target for 250 million users within two years. It also appears to be finding some success adding a premium subscription app to its core free app…
But, although 10 percent of song taggers click through to iTunes Store, giving Shazam a healthy daily affiliate income, it remains unprofitable, according to last filed accounts.
For the last year, Shazam has been offering its audio-identification technology not just for music but also as a kind of audible QR code for TV, pitching to marketers and broadcasters how viewers who tag TV shows or commercials can link to related mobile web content. It has already partnered with brands and channels on this, but now wants to go large.
Although it is expanding beyond music in to these new revenue streams, Shazam is also facing growing competition in music discovery from apps like SoundHound and the new Play by Yahoo (NSDQ: YHOO). That’s why it is having to improve the core product as well – for example, by making a recent acquisition to include in-app lyrics.
CEO Andrew Fisher (in the announcement): “This investment will support our continued growth, both organically and through acquisition, as well as the ongoing development of new features and products, keeping us at the forefront of innovation.”
Shazam last took money, an unquantified amount, from KCPB, in October 2009. Before that, its initial investment was £11.5 million from Acacia Capital and DN Capital.
Shazam is one of the most popular mobile businesses there is. It’s significant that it doesn’t think it can ultimately succeed on the nexus of mobile and music alone.
But this funding for the Shazam For TV proposition is somewhat high-wire. The whole way in which viewers will interact with their TVs is up for grabs – and it’s by no means certain that audio tagging will be it. Can consumers get their heads around the notion that their TV speakers are a gateway to a web page?