Since 2001, former record-label owner Jonathan Gill has been analyzing audio and how users listen to it. He’d answer questions like which songs are listened to on specific platforms, and help artists and producers take advantage of the best methods to push out audio.
Fast forward almost two decades later, and Gill, alongside co-founder Kevin Wright, are behind Backtracks, a company that helps podcast creators better optimize and understand their audio for better user engagement. The Austin company just raised a $2.1 million seed round, led by Moonshots Capital, and joined by Capital Factory, Next Coast Ventures, and more. So far, Backtracks has analyzed over 25 billion minutes of audio.
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However, Backtrack’s funding round is a drop in the bucket for a record-breaking year for podcasting companies.
As our Jason D. Rowley reminded us almost exactly a year ago, venture capitalists only started tuning into this sector more aggressively in 2017. The chart below shows worldwide venture investment into podcast startups and amount of deals.
So far, 2019 is on track to surpass 2018 funding totals, although total deal counts may be encountering a slow down. The possible slow down in deal counts is interesting to note. It could mean investors are willing to double down on bets for established podcasting startups, pouring large sums of money in now to maximize returns. However, it could also signal that investor interest in seed and early-stage podcasting startups is waning. If true, that will eventually dry up the pipeline for late-stage deals in the future.
But while we wait for more data to see which narrative pans out, other smaller podcast startups have also raised funding within the last year. Brew, which helps with audio monetization, raised $300,000 in March, and Sweden’s Acast, which helps with podcast advertising picked up a $35 million round last December.
Gill says remaining gaps—content monetization, deep analytics, and even the discovery of a podcast that is even interesting in the first place—in the podcasting space are opportunities for startups.
And while Apple Podcasts looms large in the market, Gill said “more publishers are shifting to wanting more control over the listener experience.” They want a podcast on their site, with their brands, their content, and merchandise.
The funding round could also be seen as a welcome signal that the podcasting industry isn’t just about Spotify’s $300 million bet on Gimlet media. The early-stage and technical are making noise, too.
Illustration: Li-Anne Dias