Digital music wholesaler Snocap, long searching for a buyer, is being acquired by music streaming site Imeem. The price will likely not be disclosed.
Snocap was founded in 2002 by Napster creator Shawn Fanning, Jordan Mendelson and Ron Conway. The company raised $10 million from Conway, Morgenthaler Ventures and WaldenVC and did high profile distibution deals with MySpace and others, but the business failed to scale (since people don’t really pay for music any more). Last year they also partnered with Imeem, who may see an acquisition as a better end result than Snocap simply shutting down. Imeem uses Snocap’s digital fingerprinting technology to track how many times any particular song is streamed on its site so that it can allocate a portion of its advertising dollars to the major music labels. Without Snocap’s technology, Imeem would have to find a replacement quickly, or find a new business model.
The deal is just being closed this week, we hear from a source. It’s a good outcome for Snocap, which has gone through significant layoffs and was on deadpool watch.
This is the second acquisition for Imeem in as many months – in January they acquired Anywhere.FM. Imeem has raised two rounds of capital, although the size of the second round was not disclosed.
Fanning, meanwhile, has largely moved on to his new startup, Rupture.