INSUBCONTINENT EXCLUSIVE:
Mixcloud, the London startup that offers an audio streaming platform designed for long-form content, has closed its first-ever funding
round, TechCrunch has learned
According to a regulatory filing and since confirmed by co-founder Nico Perez, the ten-year old company has raised approximately $11.5
million led by WndrCo, the media and technology holding company based in Los Angeles and San Francisco.As part of the investment, WndrCo
partners Ann Daly (former president of DreamWorks Animation) and Anthony Saleh (an investor and artist manager of hiphop stars Nas and
Future) have joined the Mixcloud board
The injection of capital will be used to scale the service globally and for product development, says the company.This will include doubling
down on the U.S., hence Mixcloud’s new backers, and growing the company’s 22-person team, both in London and New York (where Perez is
On the product side, I understand the plan is to “diversify the platform,” which would appear to point to a recent licensing deal with
Warner and new paid Mixcloud consumer offerings, making the company less reliant on display advertising and other types of brand sponsorship
alone.That Mixcloud has raised a decent sized funding round isn’t surprising in itself
The music streaming site, which originally wanted to be something akin to ‘YouTube for long-form audio’, has carved out a decent
following as a place to house archived radio shows and DJ mixes, and counts more than 1 million “curators” uploading content to the
However, aside from a couple of U.K
government grants in its formative years, the fact that the company hasn’t taken any outside funding since being founded in 2008 is
As is, perhaps, its survival
The history of consumer-facing music startups is littered with companies that raise significant venture capital, before ultimately crashing
and burning or being litigated out of existence.“We are fairly rare, if not unique,” Perez tells me, in his understated way
“We quit our jobs and incorporated the company in 2008 and then the next two years was the challenge of starting any new company, around
building the team, trying to raise funding, and in our case doing these innovate types of [music] licenses
And, being straight up honest with you, we couldn’t fundraise
We couldn’t find anybody to put in money
It was a very different time back then”.To put that period in context, the term ‘Silicon Roundabout,’ used to describe the emerging
tech cluster in East London where Mixcloud would eventually relocate, only entered the public domain in July 2008
And although Spotify was founded the same year, it remained very much under the radar
Meanwhile, the spectacular rise and fall of Napster over the previous decade was still fresh in the memories of investors.“There had been
several major collapses — Napster being the largest but also other services like imeem — that had grown and ultimately failed
Investors were very, very wary of the space, or maybe we were just not very good at pitching
Either way we didn’t manage to raise in the early days… For better or worse, we had to figure out how to survive by ourselves”.This
saw Mixcloud initially set up home in a warehouse in an industrial estate near Wembley, a much less fashionable part of London, in a bid to
The team also took on “small jobs on the side,” ploughing any surplus money they earned into keeping the service alive
Aside from bootstrapping and those early government grants, the key to survival was growing Mixcloud’s users at roughly the same speed as
advertising revenue, alongside pioneering new content licenses and fingerprinting technology to ensure rights-holders were paid.“Slowly,
over the next few years, it started to get traction amongst users and listeners
Then we started to make a little bit of money from Google Adsense and a few different brand partnerships
And then it took a good five or six years until we could support a small team, and we never raised investment along the way”.That journey
instilled a culture at Mixcloud of “being lean and not splashing out huge amounts of money on launch parties”
This not only ensured the lights could be kept on, but in recent years and somewhat ironically, the same financial discipline and
non-reliance on venture capital started to attract the attention of investors
As did the latent potential for Mixcloud to go international.“The next step for us — and actually part of the fund-raise — is how do
we move from bringing this very U.K.-centric streaming platform to being a global player,” adds Perez
“We looked at the wider marketplace and the time we’re in right now… and we kinda felt like if we really wanna go for it then we’re
gonna need some firepower behind us
So that’s why we did the deal”.
