Mixcloud, the London startup that offers an audio streaming platform designed for long-term content, closed its first round of financing, TechCrunch learned. According to a regulatory filing and since confirmed by co-founder Nico Perez, the ten-year-old company has raised about $ 11.5 million, led by WndrCo, the Los Angeles-San Francisco-based media and technology holding company.
As part of this investment, WndrCo partners Ann Daly (former president of DreamWorks Animation) and Anthony Saleh (investor and artistic director of hip-hop stars Nas and Future) joined Mixcloud's board ]. The capital injection will be used to expand the service on a global scale and for product development, the company says.
This will involve doubling the United States, hence the new supporters of Mixcloud, and developing the company's 22-person team, in London and New York (where Perez is now based ). On the product side, I think the plan is to "diversify the platform," which seems to indicate a recent licensing deal with Warner and new paid Mixcloud consumer offerings, making the company less dependent on display advertising and advertising. other types of sponsorship. alone.
That Mixcloud has raised a decent size round of financing is not surprising in itself. The music streaming site, which originally wanted to look like "YouTube for long-lived audio," found a decisive place to host archived radio shows and DJ mixes, and has more than 1 million "curators" uploading content to the platform. However, aside from a few UK government grants in its formative years, the fact that the company has not taken external funding since its inception in 2008 is no less remarkable. Like it's maybe his survival. The history of music startups facing consumers is littered with companies that raise significant venture capital, before they crash, burn or go bankrupt.
"We are quite rare, if not unique," Perez told me in his discreet manner. "We resigned from our jobs and incorporated the company in 2008, and then the next two years were the challenge of starting a new business, building the team, trying to raise money and in our case, to make innovative licenses. And, being honest with you, we could not raise money. We did not find anyone to put money. It was a very different era at the time. "
To put this period in context, the term "Silicon Roundabout", used to refer to the emerging East London technology cluster where Mixcloud would eventually move, did not enter the public domain until July 2008. And although Spotify was founded the same year, it stayed very under the radar. Meanwhile, the spectacular rise and fall of Napster during the previous decade was still fresh in the memory of investors.
"There had been several major collapses – Napster being the largest but also other services like imeem – who had grown up and eventually failed.Investors were very, very suspicious of the space, or maybe we were not very good at throwing in. Anyway, we were not able to raise in the early days … For better or for worse, we had to find how to survive by ourselves. "
This is how Mixcloud first settled in a warehouse in an industrial area near Wembley, a much less fashionable area of London, with the goal of keeping costs down. . The team also took "small jobs on the side", plowing any surplus money they earned by keeping the service alive. In addition to the bootstrap and the first government grants, the key to survival was to grow Mixcloud users at about the same pace as advertising revenue, alongside new content licensing and fingerprinting technology. ensure the payment of fees.
"Slowly, over the next few years, it started gaining ground among users and listeners.Then we started to make some money from Google Adsense and some branded partnerships And then it took five or six good years before we could support a small team, and we never increased the investments along the way. "
This trip instilled in Mixcloud a culture of "being thin and not spending huge amounts of money on pitching parties". This has not only kept the lights on, but in recent years and, ironically, the same financial discipline and non-confidence in venture capital have begun to attract the attention of investors. Just like the latent potential of Mixcloud to become international.
"The next step for us – and in fact part of the fundraiser – is how to move from this very UK-centric streaming platform to a global player," adds Perez. "We looked at the wider market and the moment we are right now … and we had a little feeling that if we really wanted to go then we would need some firepower behind That's why we did the business. "