Apps & Mobile Just 10 Days To Find Angel Funding After Only Investor Withdraws

Bloomfm-game-overUPDATED: Music streaming service says they're shutting down (see update after the jump) due to a surprise withdrawal of funding by their sole investor, Russian TV channel TNT. Founder Oleg Fomenko says they had great momentum and felt that they could have sold the service if given more time. Andrea Leonelli speculates that this announcement may also be a way to attract last minute investors. We'll see how that plays out, but the news maps all too easily to the implosion of both streaming music services and huge investments.

UPDATE: "We’ve decided we’re going to run a 7-10 day bidding process to see who wants to buy us. Around a dozen people have expressed interest already, and the process is probably going to be run by our administrators,” CEO Oleg Fomenko told Music Ally ​today​

Yesterday announced that it's "game over" and posted the following statement on their blog:

We’ll keep this short because we’re pretty shell-shocked.

It’s game over for

Our investor, who’s been along for the ride since day one, has unexpectedly pulled our funding.

It’s come so out of the blue that we don’t have time to find new investment. So, with enormous regret, we have to shut up shop.

This is a poetically crappy turn of events as our young business was showing real promise. Our apps and web player are looking super-nice and we had 1,158,914 registered users in a little over a year. Yep.

A massive thanks to everyone that helped us get this far. We’re absolutely gutted. But it’s been a real pleasure.

Founder Oleg Fomenko told VentureBeat that their only investor was Russian TV channel TNT which pulled funding after an organizational change. Fomenko stated:

"It’s a shame that it happened exactly at a time when we could have sold — if we had the runway."

Fomenko says they had great momentum and the suddenness of the announcement led to some interesting speculation by Andrea Leonelli:

"If the funding was pulled as suddenly as described in the post the company’s public reaction may also be a way to attract press and last-minute investors who may be able to salvage the service. In that sense it's not all over yet in spite of the company claiming that it's too late for another investor to step in."

That's actually quite possible. When the stakes are that high brinkmanship can turn what looks like total disaster into an eventual huge success as Ben Horowitz describes in "The Hard Thing About Hard Things."

Leonelli also points out that "attracted many first timers to the music streaming space" and its shutdown "could be a massive blow to the credibility of streaming services in general amongst those mainstream consumers."

Given the challenges in the streaming space this may well be the end. If such closures do damage the audience for streaming services then additional challenges may face the survivors as other services inevitably shut down.


Hypebot Senior Contributor Clyde Smith (@fluxresearch) posts music crowdfunding news @CrowdfundingM. To suggest topics about music tech, DIY music biz or music marketing for Hypebot, contact: clyde(at)fluxresearch(dot)com.

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