Exclusive: Social Music Startup Rdio Raises $17.5 Million, Adds Rob Cavallo To Board

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Rdio, the social music startup founded by Skype founders Janus Friis and Niklas Zennstrom, isn’t exactly waiting around for Spotify to make its way to the United States (or Google Music for that matter).

TechCrunch has learned that the company has secured $17.5 million in funding from new investor Mangrove Capital Partners, along with earlier backers Skype, Atomico Ventures and Friis himself through some of his investment entities.

Ironically, Friis co-founded Rdio as well as most of its current list of investors, apart from Mangrove Capital Partners, which did famously back Skype during its very early days and made a ton when the company was eventually sold to eBay.

Rdio has also gained a new board member, and not just anyone; the company has appointed Warner Bros. Records Chairman Rob Cavallo as its new director. Cavallo is a Grammy-nominated producer known for his work with artists like Green Day, Dave Matthews Band, Fleetwood Mac, Jewel, Kid Rock and Alanis Morissette.

He joined the Rdio board specifically to help further strengthen Rdio’s relationship with the music industry, something rivals Spotify and even Google have been struggling with, particularly in the US. Rdio already has relationships with EMI Music, Sony Music Entertainment, Universal Music Group and Warner Music Group in place, as well as agreements with thousands of indie labels.

Users of the unlimited, on-demand social music service (such as myself) can currently build and share online music collections from a catalogue of over 8 million songs.

Rdio offers a Web-only music streaming music service for $4.99, and a premium version that adds mobile access for $9.99 per month.

Rdio will use the additional capital to expand to new platforms and new regions in the course of this year. Part of the funds will also go towards hiring new employees, ramping up marketing efforts and product development.

On a funny sidenote: word about Mangrove’s investment in Rdio leaked out last week, albeit without the size of the round or any other details, when Mangrove partner Mark Tluszcz sent a tweet to MC Hammer before any public announcements about their involvement. Doh!

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