Looking for that next booming trend in the tech industry? Perhaps you need to look no further than music, as a report from the site Indie Music Tech shows that this year’s first quarter music tech investments nearly doubled from the previous two years. Author Duncan Freeman estimates 25 deals in Q1 2010, far surpassing the 27 total investments in the opening months of 2008 and 2009, but averaging a slightly lower deal size at $4.4 million per investment.
While more deals are being inked in the music tech industry, the average size dropped slightly from previous years. In the first quarter of 2008 and 2009, 27 investments totaled $132 million at an average of $4.8 million, while 2010 has seen 25 deals at $110 million, or $4.4 million per deal.
Among the largest and most notable deals of the year so far include Spotify’s undisclosed amount of funding from Founders Fund, $20 million which went to startup Guvera and speaker manufacturer Sonos which received $25 million from Index Ventures. Other well known startups, such as SeatGeek, Songbird, TuneWiki and BlogTalkRadio all received various amounts of VC investment in the first quarter of this year.
It seems the market for music startups is slowly warming and gaining traction with investors. Companies like Spotify are thriving and others, like the now Apple-owned Lala, are being snatched up by large corporations. These early estimates suggest 2010 could be a profitable year for music startups, so entrepreneurs may want to investigate how they could provide a valuable service in this sector.
Let us know what you think about the music tech space and where you think trends may lead this year by posting a comment below!
Chart from Indie Music Tech.
