Music Startup Echo Nest Raises $7M to Power the Next PandoraOctober 05, 2010
by Anthony Ha
The Echo Nest, a startup building a massive database of musical artists and songs, just raised $7 million in a funding round led by Matrix Partners.
Matrix’s Antonio Rodriguez is joining the Echo Nest board. Asked to describe the Somerville, Mass. startup, he said that if music applications and services like Pandora are the new gold diggers, then EchoNest is “the commissary that will sell the picks and shovels.” In other words, it creates the data (such as musician news and reviews, song beats and similar songs, listener demographics, and more) that can be used to create new music apps.
Pandora actually has its own data platform, created by what it calls the Music Genome Project, but its data is generated by musicians listening to music, and they take about 20 minutes per song. The Echo Nest has built technology for analyzing music without human involvement, so the process take about three seconds per song.
The companies aren’t direct competitors, since Pandora makes money off its own Internet radio services, while The Echo Nest offers its data to music application makers, i.e., potential Pandora competitors. You can see a list of some of the company’s partners here, the best-known include MOG and Thumbplay.
Of course, a number of music startups (including Pandora) have struggled to negotiate reasonable licensing fees with the record labels. Echo Nest’s customers may find a way to avoid these difficulties. Chief executive Jim Lucchese said his larger customers are looking to work with small application developers, which benefits both sides — large companies get to tap into the cool work that indie developers are doing, while the developers get to take advantage of the licensing agreements that their larger partners have already made.
Previous Echo Nest backer Commonwealth Capital Ventures also invested in the new round.