CONFIRMED: Turntable.fm Has Raised $7.5 Million Round At $37.5 Million Valuation
We read earlier today that group music/DJ site Turntable.fm was raising a multi-million-dollar round. — After speaking with sources involved in the financing, we can confirm that term sheets were indeed signed yesterday …
Context & Ripple Effects
Two years into a run of headline-grabbing consumer-web rounds — Spotify's €170 million valuation in August 2009, Tumblr's $25 million raise last December — Turntable.fm now converts its summer buzz into a signed term sheet: $7.5 million at a $37.5 million valuation, confirmed by Business Insider with sources in the financing.
The syndicated pickup from Betabeat frames the raise through a different lens, holding Turntable.fm up as an example of a start-up pivoting under industry pressure — so this round is funding not just growth, but a company still searching for what it wants to be when it grows.
First-order effects
- Turntable.fm gains roughly $7.5 million of runway to scale its group DJ rooms and absorb the load that comes with them, while its new investors hold paper worth five times the money in at a valuation set by engagement, not revenue.
Second-order effects
- Rivals in streaming and social music — Spotify most prominently, already two years into its own valuation climb — face a market where listening is expected to be communal, forcing product responses and pushing up competition for licensed catalogs.
Third-order effects
- If capital keeps flowing to consumer social products on engagement alone, expect more rounds like this one priced ahead of any business model — with the pivot risk Betabeat flagged becoming the standard caveat on social-music investing.
The trend: Social consumer web start-ups in 2011 are converting viral engagement directly into venture rounds at valuations set well before their business models are proven.