The people who built Turntable.fm (some of whom might be in this video) have reason to celebrate today. Their group-listening DJ party web app, Turntable.fm, has reportedly pulled down a $7.5 million investment round from New York City-based venture capital firm Union Square Ventures, valuing the company at nearly $40 million.
According to what “multiple sources” told Betabeat, Turntable.fm, known to have been looking for investment money (in so small part, we imagine, to pay for the cost of streaming the music it licenses, which comes from MediaNet and users’ hard drives), is still finalizing paperwork on the deal, but it values the startup at $37.5 million.
After using Turntable.fm since May, we’re not too surprised. Here’s why:
1. Turntable.fm takes “social music” beyond the buzzword.
2. People have built or discovered power tools to help you get more out of the service in just a few scant months, like this scrobbler and this DJ/room tracker.
3. It’s popular, which is another reason it needs this investment: to cover server, licensing, and other costs of scaling up to accommodate hundreds of thousands of users in the United States alone — something it has had problems doing already. It also might need lawyers to deal with its mash-up rooms.
4. It makes people behave in ways I’ve never seen elsewhere on the net, and I’ve been writing about internet stuff full-time since 1997. It might even be neat enough to warrant its own hardware, which would of course be open-source and able to work with other web apps.
5. As I told the New York Times last month, “It’s not hard to imagine listening to music in a room sponsored by a big company like Sprite.”
I guess I really meant Coca-Cola, but I said Sprite because it has traditionally done plenty of marketing alongside hip-hop. Anyway, the point stands: Brands love to sponsor live music festivals, and sponsoring avatar-filled online listening rooms wouldn’t be too big of a leap. (As I also told the New York Times, “Once it has to be scalable to the millions, some of the magic can be lost.”)
Turntable.fm, a spin-off from the barcode scanner company Stickybits, will find itself in good company once this deal — reportedly at the paperwork stage — is complete. Union Square Ventures has also invested in Boxee, Disqus, Etsy, Foursquare, Kickstarter, Meetup, Soundcloud, Tumblr, Twilio, Twitter, Zynga, and others.