Songza Tunes In for $4.7M, Amps Up Ad Technology

9/10/13Follow @jpruth

Streaming music geared for your mood seems to flow well with Songza’s backers. The Long Island City, NY-based startup announced Tuesday it raised $4.7 million in equity financing from its investors that include Gary Vaynerchuk, Lerer Ventures, and Amazon.com.

Songza is a platform that curates music for listeners based on their lifestyle and situation, such as late-night studying or lounging around in the afternoon. This is the company’s second funding round, says CEO and co-founder Elias Roman, having raised $2 million in 2011.

The newest funds, he says, will go towards tooling up Songza’s native advertising software, called Branded Moments, which lets marketers sponsor playlists of songs—replete with branding at the front end that steers users to the suggested music mix—that relate to what Songza listeners are up to. “Right before the playlist starts you may see a 15 second video on the product,” Roman says. “After that video, you are listening interruption-free for as long as you want.” In addition to pre-roll video, display banner ads might appear on screen though without halting the music. Further, Songza does not use audio ads in the middle of the playlists, he says, which would pit advertisers against users’ desire for music.

Companies such as Samsung, Colgate, and Nissan have already been using Branded Moments, which Roman says went live this summer. He believes the development of such ad technology, which relates to what customers are doing, is a significant evolution for his company. “Native advertising is the beginning of one of the biggest shifts we’ve seen since ads went digital and online,” he says.

The latest funding includes the $3.8 million listed in an SEC filing made in April by Songza. Part of the proceeds from the new financing will be used to cover some of the company’s previous hires this year as well as potential hires to come, Roman says.

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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