/// Echo Nest Raises $17 Million for Musical Big Data
You have to be incredibly brave or foolish to bet investment money on a digital music startup. But what about a data company, which happens to sell services to digital music startups? That seems more palatable. At least to the investors putting $17 million into The Echo Nest , which maintains databases used by companies like Spotify, Vevo and Nokia. Norwest Venture Partners led the round, and previous investors like Matrix and Jim Palotta, who had put in more than $8 million into the company, re-upped. People like saying “big data” right now, and Echo Nest describes itself as “the leading music big data company”. What that really means is that it has a giant pile of information that music companies use to create recommendation engines and other features for their services. The best thing about that business is that Echo Nest gets to participate in digital music without having to deal with the headaches and costs of music licensing, which have sunk just about everyone who has tried to make a go of it so far (the jury is still out on Pandora and Spotify). The downside is that there are a limited number of digital music companies that can use what Echo Nest is selling. Because digital music companies are really hard to run.
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