Murfie, an online marketplace that rips and sells the downloads of used music CD's, has closed a funding round of $1.4 million led by DaneVest Tech Fund along with angel investors including Barry Silbert, CEO of SecondMarket. The Madison, Wisconsin based startup has also been selected for the TechStars Winter 2012 Boston Program.
Murfie users send in CD's, which the company stores in a "secure facility", rips them and puts the downloads up for sale. If Murfie sounds a bit like controversial used mp3 marketplace ReDigi, who are currently being sued by EMI, the difference is that Murfie takes possession of and stores the CD before ripping and selling it. That's an important distinction that is still likely to be challenged in the courts by record labels.
Since launching last year, Murfie says it has 4,000 active customers selling more than 120,000 CDs, with about 1- 2,000 new CDs coming in daily. The new funds are slated for marketing initiatives and scaling-up Murfie’s technical infrastructure.