Rioport Raises $30 Million in First-Round Financing
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RioPort Inc. Wednesday announced it has closed $30 million in first-round venture financing and has begun operating as a separate company.
Rioport was previously operating as a subsidiary of S3 Inc., which recently acquired RioPort's parent company, Diamond Multimedia.
Oak Investment Partners and Vulcan Ventures, Inc. have provided RioPort with operating capital to further build and proliferate its integrated digital audio platform for the delivery, management and playback of music and spoken audio content. RioPort will utilize the funds to invest in Internet and content aggregation activities, application software development and design services. S3 and Diamond Multimedia have funded the company since its inception.
Rioport and Viacom's MTV Networks Online have also finalized a multi-year e-commerce and equity agreement. Under the terms of the deal, MTV Networks Online, and its subsidiaries MTVi and Nickelodeon Online, will receive a share in revenues generated from digitally downloaded music sales across the MTV Networks Online network. MTV Networks Online will also receive an equity stake in RioPort. In addition, RioPort is licensing to MTV Networks Online customized versions of its RioPort Audio Manager for all of the MTV Networks brands, including MTV, VH1, SonicNet and Nickelodeon. In turn, MTV Networks Online will provide Rioport with content and promotional support.
"RioPort gained an extremely valuable foothold in the digital audio space by being the first company to provide consumers with a portable solution for MP3 music playback. We see vast potential in RioPort's ability to now deliver to consumers through its portal customers, a complete digital audio solution," said Fred Harman of Oak Investment Partners.
"RioPort's innovative digital audio platform is a natural fit for our portfolio of Wired World investments," said William Savoy, president of Vulcan Ventures.
Central to the RioPort platform is its RioPort Audio Manager Software, which allows people to acquire, manage and play back digital audio tracks from their desktop PC or portable player. In addition to providing the RioPort Audio Manager to consumers, RioPort is licensing customized versions of its software design to outside parties. RioPort is also a distributor of digital audio content through its RioPort.com site, an Internet destination for accessing music and word programming, digital audio hardware, software and tools, consumer services, and information. In addition, RioPort designs portable digital audio appliances, including the Diamond Rio 500, which it licenses to third-parties for market delivery.