College music site Ruckus raises $10M
Ruckus, which provides college students free unlimited PC and laptop download access to more than two million songs, has raised $10 million in a second round of financing.
The service is apparently making headway on competitor Napster, which offers a similar service. Earlier this month, Penn State dropped a partnership with Napster, in favor of Ruckus — because Ruckus did not charge it for the contract.
However, there’s no sign the company is making headway on revenue. Students are unlikely to upgrade to its paid premium service, because students are frugal — and because it competes with Apples’ iTunes. The company isn’t saying anything about revenue.
Indeed, the new money will be used to find ways to push advertising to support the basic free access, it said. It has signed contracts with 40 new schools over the past school year, for a total of 120 schools in its network nationwide. The site is also pushing social network features. Any student owning a .edu address can access the service — even those from schools without a contract. The music includes songs from all the major labels and various independent labels. It has added access to full-length films to its offerings, too.
The company charges $19.95 a semester to students wanting to download music to portable devices, and $14.95 a semester to download movies, but concedes that revenue from this is “nominal.”
Investors are Anschutz Investment Company and Columbia Capital. Existing investors include Battery Ventures, Eastward Capital, Pinnacle Ventures and Shelter Capital, although Pinnacle did not invest in this round. The Herndon, Va. company has now raised more than $33 million.
Ruckus’ parent company is Ruckus Network.
Next Story: SpectraGenics draws at least $20M for laser hair removal
Previous Story: Buzznet, yet another social network, raises $6 million
About the Author, Matt Marshall
Matt launched VentureBeat in September of 2006, with the realization that no one else was covering the entrepreneurial and tech innovation scene with the velocity or depth that he was. Prior to founding VentureBeat, he covered venture capital for the San Jose Mercury News from 2001 to 2006. In 2002, Matt was awarded "Journalist of the Year" by the Northern California Society of Professional Journalists. Prior to working at the Merc, he was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 to 1998, and a writer for the Washington Post in 1994. Matt holds a PhD in Government and an MA in German and European Studies from Georgetown University. In addition to VentureBeat, Matt is also the Executive Producer of DEMO, the leading launchpad event for emerging technologies.
