14 DAY TRIAL // It's been a good week for Pandora, the online radio station, with the recent updated licensing agreement between music representatives and online radio stations, which should give them a much better chance for survival. And now, perhaps not coincidently, Pandora has managed to secure another $35 million in funding ensuring a brighter future for a company that was on the brink of collapse.
Rumors about the new funding started yesterday and were quickly confirmed by Pandora CEO Tom Conrad; however, he wasn't specific on the amount of money the company got. He did say that the funding was led by San Mateo, CA-based venture capital firm Greylock Partners. David Sze, a partner with Greylock, will be joining Pandora's board of directors. Sze was also involved with the venture firm's investments in Facebook, LinkedIn, Digg and others. Greylock will be joining a somewhat lengthy list of investors, Crosslink Capital, Walden VC, Labrador Ventures, King Street Capital, Hearst Corporation, DBL Investors and Selby Ventures.
If the sum does turn out to be accurate, it would be the single largest investment in Pandora with the total sum amounting to $56.3 million. Pandora is coming in on its best quarter yet, $19 million in revenue in 2008 and an expected $40 million for 2009, at which point the company is also expected to become profitable.
Things haven't looked so good for the firm for a while now, at one point being close to closure after not being able to pay the high amounts of royalty fees the music labels demanded. Finally, a new deal was struck this week with labels agreeing on a 0.08-cent fee per track streamed per user down from the previous 0.19 cents. The fee will rise to 0.14 cents by 2014 and the deal differs with the size of the online radio but it should give it a chance to set up a business model by then.