Music-focused social networking site Imeem has raised about $2.4 million recently, and is looking to raise about $4 million more, according to a recent SEC filing about the money raised. It is not clear from the filing who it raised more money from, and the company refused to comment or clarify the filing. What is clear that the money was raised from a single previous investor, which is likely to be Sequoia Capital in this case.
This comes on heels of its almost-back-from-the-brink successful attempt to get better licensing terms from the labels, moving them away from the onerous pay per stream model (it is a free site, ad-supported) to a revenue-per-user model, and lower streaming fees, according to reports. The company told us earlier that "even during the current economic climate, Imeem's ad business has continued to grow. Today, we have over 30 campaigns live on the site, many over the six-figure range..".
But industry observers have said this money may not be enough to help the company last till the end of this year, unless it is able to raise more money and improve revenues from advertising. Warner Music, which invested $15 million in the company, completely wrote off its investment earlier this year, and also "pardoned" off the $4 million in streaming royalties that Imeem owned it, so that's a big help. For a more pessimistic take on the company's future, read our previous analysis (which Imeem has vehemently rebutted): "Better Licensing Terms May Not Be Enough To Save Imeem." Of course, this isn't just an Imeem-specific issue: lots of other free/ad-supported music sites, including MySpace Music, are facing their own share of troubles, both as a result of the labels' terms as well as the economy.
By Rafat Ali