Russian music-streaming platform Zvooq yesterday announced it secured an investment of $20 million in a Series A round led by Ulmart, Russia’s leading online retailer, with the participation of Essedel Capital, a Helsinki-based private equity fund.
The funds will be used to bolster and promote Zvooq’s freemium music-streaming offer. Zvooq will also “initiate roll-out of the service in some other emerging markets.”
Zvooq’s platform integrates directly into social networks, phones and cellular carriers’ offerings to provide a mass market solution easily available to any potential listener. While music piracy remains a major issue in Russia, Zvooq allows any online service to integrate a free, legal streaming solution into their products, aiming to convert illegal consumption of music into legal consumption.
“Integrating Zvooq is a way to monetize music for the masses and give consumers legal music where they want it. This is the first real alternative to piracy in these markets,” claims Zvooq co-founder Victor Frumkin.
“The power of Zvooq is that, once a user starts using the service, they discover a far richer experience than through unlicensed alternatives. Everybody wins,” added Frumkin, who defines his company’s mission as to “bring a quality music listening experience to anyone with a mobile or Internet connection across emerging markets.”
Zvooq claims that its catalog includes over 15 million songs, supporting 500,000 artists and 25,000 labels. The user side is like Spotify and iTunes combined – options include streaming with ads for free, a subscription model and à la carte purchases, as well as curated playlists.
Since its start in 2010, the Zvooq project has been conducted by Simon Dunlop, a British businessman living in Moscow, and supported by a group of Western and Russian business angels.
Global music-streaming revenues from services like Zvooq accounted for 56% of the Russian music market’s growth in 2013, according to the company, which cites figures released by the International Federation of the Phonographic Industry (IFPI).
Last May, Ulmart announced a $6.5 million investment in Dream Industries, a holding which comprises Zvooq, e-book platform Bookmate and other projects. Of the funds raised, $3 million went to Bookmate, aimed at developing the platform further in Turkey and launching it in Scandinavian and Latin American markets later this year. Another part of the investment went to Zvooq.
