TuneIn takes on Pandora, Sirius to bring streaming radio to cars

Want to hear an Antarctica-based folk music station in your car? How about a radio broadcaster that plays only Grateful Dead covers?

TuneIn is trying to make that a possibility for more people. The Palo Alto company, founded in 2002, is taking on competitors such as Pandora Media Inc. and Sirius XM Radio Inc. in the automotive market by offering products that stream music, news, sports and talk radio stations in vehicles.

The company’s website and mobile apps aggregate and stream content from stations around the world and generate revenue from digital display ads and commercials that play before the stream begins. It shares ad revenue with broadcasters.

Streaming radio has become increasingly competitive. Not only are Pandora and Spotify established services, but Rdio and Beats by Dre’s MOG are gaining popularity. Although music streaming services have become trendy, many have struggled to generate profits.

To bring its business to the auto industry, the company has to tweak its system for each car model. With Tesla Motors Inc. cars, which connect to the Web, drivers can access TuneIn through the dashboard. With BMWs, the users have to plug their smartphones into the in-car system.

Chief Executive John Donham said he wants to change the way people listen to radio on the road, giving drivers access to a multitude of niche and region-specific stations otherwise not available.

He said there’s a big market of drivers who listen to music in their vehicles but can’t access stations they want.

“Half of all radio listening happens in the car, and yet we only get 70 options when we get into the car,” said Donham, who previously ran the Disney-owned social gaming company Playdom. “We see it as a huge opportunity and we’re trying to get into as many models as possible.”

The company said Wednesday that it has secured a $25-million round of funding led by Institutional Venture Partners, with participation from Sequoia Capital, Google Venture and General Catalyst Partners.

It plans to use that funding in part to for further expansion of its automotive business. TuneIn has partnerships with car manufacturers including General Motors Corp., Ford Motor Co., Mercedes, BMW, MINI Cooper and Tesla. The service is available in 30 models, compared with Pandora’s 50 models.

TuneIn says it has 2 million monthly active in-vehicle listeners through dashboard integrations and car-mode listening.

TuneIn’s main line of business is its streaming services for the Web and mobile devices. It has 40 million monthly active users worldwide and said it has surpassed 1 billion listening hours this year as of April.

That’s not nearly as many active listeners as publicly traded Pandora, which says it had 69.5 million active listeners as of March.

TuneIn is free to use and gives users access to some 70,000 AM, FM, HD and Internet radio stations, along with 2 million on-demand programs for streaming. TuneIn would not disclose revenue figures, but said its revenue is not enough to be meaningful to broadcasters yet. “Our hope is to continue to improve tools for broadcasters to monetize,” Donham said.

The company said it will use some of the new funding to develop new products and hiring new personnel. It recently brought on Axel Martinez, formerly assistant treasurer and head of capital markets at Google Inc., as its chief financial officer.

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Twitter: @rfaughnder