Echo Nest, the music intelligence platform, announced the closing of a $17.3 million financing round led by Norwest Venture Partners with the participation of prior investors Matrix Partners, Commonwealth Capital Ventures, Fringe Partners, Jim Pallotta and board member Michael Brown.
“We are thrilled to add Jeff Crowe and Norwest to The Echo Nest team,” said Jim Lucchese, CEO of The Echo Nest. “Norwest immediately recognized the enormous opportunity around applying a big data approach to music — particularly in how understanding each online consumer’s musical identity can enable a new world of deeply-personalized, social, and profitable applications. In addition, the firm brings a depth of experience in helping data-driven companies define and dominate their respective markets.”
The new round of funding will be used to continue sales growth, international expansion, and new product development. Aside from the funding announcement, there will be a few major additions to their Fanalytics listener data platform in pursuit of an even better understanding of music.
Fanalytics’ product enhancements include Taste Profile Similarity and “affinity prediction”. Taste Profile Similarity is a new data service that gives applications and music services the ability to connect like-minded fans by determining their overall musical compatibility within a larger group while “affinity prediction” is how music preference is predictive of other media preferences and psychographic attributes.
If you have no idea who or what Echo Nest is, they’re the ones responsible for selling services to Clear Channel’s iHeartRadio, eMusic, MOG, Spotify, Nokia, the BBC, and VEVO. Echo Nest prides itself as “the leading music big data company,” which simply means that they hosting a huge load of information which is used by music companies use to create recommendation engines and other features for their services. So you could say that without Echo Nest, you won’t be able to enjoy listening to your favorite songs in Spotify or MOG.
“The Echo Nest has distinguished itself as the clear market-leading data company focused on the most pervasive form of entertainment consumption: music,” said Jeff Crowe, Managing Partner at Norwest Venture Partners. “We are very excited about the company’s business model of exploiting the data opportunity around music consumption, the team’s excellent progress in inking a steady stream of industry-leading customers, and the large market opportunity in understanding digital consumers’ musical identity on a mass scale.”
The best part about their business is that they get to be a part of the music service business without having to deal with the legal aspects of the service like striking up deals with record labels and dealing with the legal hassles if you don’t get the deals approved. The downside is, there’s not a lot of cloud music services to sell their stuff to. That’s why they’re venturing beyond music.