UK-based ‘pay-as-you-go’ music streaming service Psonar is looking to raise another £1m – and has turned to crowd-funding to help it achieve its aim.
Psonar has already raised £1m to date from its founder and private investors to fund the development of the service.
Now it’s after another seven figure cash injection, and is off to a good start – banking £305,000 from private investors.
Part of Psonar plan to raise another million is a campaign on Crowdcube, which already appears to be going rather well.
Psonar co-founder and CEO Martin Rigby is offering 5.93% equity in his business for £250,000 on Crowdcube.
In less than 24 hours, Psonar has already raised in excess of £101,000 from five investors – with one individual laying down £100,000.
And in a bonus for Rigby, the London Co-investment Fund (LCF) has committed to investing up to £100,000 in Psonar on a matched funding basis with the current Crowdcube fund-raising.
“The investment we’re raising on crowdcube will position Psonar for international expansion, including the USA at the end of this year.”
Martin Rigby, Psonar
Add all that together – £305k privately raised, £101k on Crowdcube and £100k from the LCF – and Psonar is already over half-way towards its million-pound target.
Psonar is live in beta in the UK and Ireland, with over 2.5M tracks including Universal Music’s popular music catalogue and those of the major independent distributors.
The funds from the current fund-raising round will be used for further product development, and to accelerate business development, in particular partnerships with mobile operators, device makers and other digital service providers both in the UK, Europe and the US as well as in developing markets.
Martin Rigby said: “In the last two years there has been a major shift in consumption of digital music, from downloading to streaming. Streaming growth has been focused around variations of a single payment model: subscription of £9.99 per month on mobile. The major limitation with this model is that it is unaffordable for many consumers in developed economies and the vast majority of consumers in developing economies.
“Psonar is a business with global potential – hundreds of millions of music fans worldwide have smartphones but don’t have credit cards or bank accounts. Psonar offers them access to on-demand streaming music on a PAYG basis, which is affordable, flexible and gives them complete control over how much they spend.
“The investment that we are raising on Crowdcube will position the service for international expansion, which includes launching the service in other European territories and the USA at the end of this year. We anticipate raising a larger series A round in late 2015 or early 2016 to accelerate Psonar’s global roll-out plan.
“Our target territories for further expansion starting in late 2015 include sub-Saharan Africa, south-east Asia and Latin America”, Rigby continues.Music Business Worldwide