Social music service Beatrobo has raised Series A funding of US$1.1 million from Japanese convenience store chain Lawson and Genuine Startups, an investment fund spun off from accelerator Movida Japan.
An Echelon 2012 alumnus, Beatrobo is a music discovery and sharing service that lets you build music playlist from YouTube and SoundCloud. The app groups playlists into customisable robots, which would live in your digital “room”.
Its latest product, PlugAir, is an earphone jack, whose function is similar to a USB key, but the device doesn’t actually store data and runs solely on electricity from the phone. The microprocessor inside the device relays unique personal information that is stored on the cloud to the phone. This is not limited to music, but also books and other digital content.
The investment will be used to develop and expand PlugAir hardware and digital key. Specifically, it is “focused to be used for hiring engineers and the product development team. It will be for supply chain management and improving the technology.”
Hiroshi Asaeda, CEO and Co-founder, Beatrobo stated that his ultimate goal is to replace the CD and change the music industry. In Japan, the support of popular idol groups fits well into Beatrobo’s strategy, because PlugAir can be used as a fan management tool for artists to incentivise users.
How? Artists can control the distribution of the songs they produce to their fan club, for example, giving their fans limited samples of their latest music only available for a certain duration. If the fans share it with their peers, driving word-of-mouth, artists could unlock the full content for more supportive users, making that particular track free. However, this does not detract from the sharing experience among consumers at all, because playlists can easily be made fully sharable among friends.
Though Beatrobo did start as a music startup to change the way people consume music, Asaeda believes that with this technology, Beatrobo can change the way people consume digital content. He mentions that while digital content works for some cases, there are other cases where its not the ideal medium. For example, if there was an exclusive digital content for a certain fan, it would be difficult to share it on the web, or Youtube, or on the PC. PlugAir can make it happen.
The focus of any hardware startup in Asia would be the distribution and production of their product; the investment and partnership by Lawson would solve these twin issues. Beatrobo would license its patent to Lawson for production, and additionally, it would have access to the chain’s distribution network. Asaeda explains the appeal of the tie-up with Lawson by saying, “There are more than 50 HMV stores in Japan. Lawson? More than 10,000. Millions of customers a day will have a chance to see [PlugAir].”
UPDATE – In an e-mail interview with e27, Asaeda revealed that he sees a trend in Japan where large companies imitate small innovative startups, and then proceed to kill them with their superior scaling abilities and resources. The reason why Beatrobo is a exception is because certain ideas are very difficult to imitate, and the startup has the capability to scale into a larger firm. He also makes it clear that his strategic partnership with Lawson is more important to him than just raising cash from investors alone.