DEAL OF THE DAY: FULLAUDIO, $15M September 11, 2000
As MP3.com and Napster get pummeled in court for their unlicensed use of copyrighted music, a slew of "legal" music startups are tuning in VC dollars. The latest recipient is Fullaudio (www.fullaudio.com), which just raised its second round, bringing its total funding to nearly $20 million.
The Chicago startup plans to make money by selling a new wireless device and service that allows consumers to play digital music over their stereos and radios. The device, which has yet to be priced, will be available by the end of March. Fullaudio plans to make the bulk of its money by charging audiophiles $10 to $20 a month to use its service. The company also plans to license its audio device and platform to consumer electronics companies, PC manufacturers, high-speed broadband suppliers, and Internet audio companies.
The company, founded last year, has yet to crack the charts. For starters, 36-year old CEO Chris Gladwin still has to get permission from record labels and music publishers to use their content. Fullaudio is talking with Universal BMG, Warner Music, EMI, and Bertelsmann. Mr. Gladwin must also work out an agreement on how to divvy up the revenues from the service. But Fullaudio’s biggest challenge will be breaking through the noise in its space. Competitors include Kerbango, SonicBox, Liquid Audio, Panja, ZapStation, MP3.com, Emusic, S3, and Rioport.
INVESTORS: Venture Strategy (lead); New Enterprise Associates (NEA); Kettle Partners
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