Online radio startup Earbits (YC Winter 2011) is announcing a seed round of funding today, having snatched up $605K from Y Combinator, Charles River Ventures, Start Fund and former Lala CEO Geoff Ralston.
Earbits is unique in that its closest competitor is the newly IPOd Pandora from the listener’s side but from the musician’s side the model is completely different. Founder Joey Flores likens the site to payola 2.0. Come July Earbits plans on taking bids from musicians in order to offer streaming time (a practice that is illegal on normal radio, as well as opportunities to market themselves through the site.
Also unlike Pandora Earbits will not offer ads, instead banking on the fact that bands will pay for a a platform to promote themselves. Right now Earbits is working with 140 record labels and Grammy award winning artists across 80 channels, with 1700 artists total.
Traffic has been up 185% in May with record listener engagement according to Flores, who plans on using the new cash for hiring, ” Our audience is starting to grow but we’re just looking to accelerate the pace of how we acquire more content and more listeners,” he said.
Y Combinator is a venture fund which focuses on seed investments to startup companies. It offers financing as well as business consulting along with other opportunities to 2-4 person companies looking to take an idea to a product. Y Combinator looks for companies with “good” ideas over companies with experience and a business model. The company made its first investments in Summer 2005. Y Combinator selects companies to finance and consult with twice a year. They are located in...