Beatnik Secures $11 Million in Venture Funding

Beatnik Inc. Tuesday secured $11 million in new financing from a group of
investment firms, including Mayfield Fund, Entertainment Media Ventures and
Zomba Group of Companies.

“Beatnik is thrilled with this significant round of funding provided by key
influential investors in the technology, entertainment and music industries,”
said Lorraine Hariton, Beatnik president and chief executive officer.

“We are now poised
to realize our growth potential, and this funding further validates Beatnik’s
leadership in the interactive audio industry.”

Recently the company has gained notice for its audio content partnerships with Yahoo Digital! and MTV Online Web sites.

The Beatnik Audio Engine has
been licensed to an expanding family of strategic partners, including
Microsoft, Sun Microsystems, Intel and Liberate (formerly NCI). The company’s
Rich Music Format (RMF) is emerging as a Web standard for high quality,
interactive, multi-track music that does not require large file sizes or
streaming, and provides secure Web-site licensing, usage and artist copyright protection.

“Beatnik’s ability to consistently and elegantly execute on their vision of ‘sonifying’ the web is generating a lot of excitement and momentum for the company, not to mention for the industry at large,” said Allen Morgan,
Partner of Mayfield Fund. “The company is quickly gaining marketshare and
mindshare for their authoring tools and Beatnik Player, which is enabling Web
developers to add rich layers of sound and music to their sites for an
entirely new competitive advantage.”

Beatnik samples and remixes enable musicians and recording artists to promote
their craft directly to their fans on the Internet by offering audio
previews, multiple variations and truly interactive versions of new songs on
Web sites, such as those featured on MTV Online, Yahoo! Digital, and
davidbowie.com.

“Beatnik has created an innovative platform for promotion opportunities in
the music industry,” said Sandy Climan, Managing Director of Entertainment
Media Ventures. “The ease at which anyone can record and promote music on the
Web with Beatnik is already causing ripples in the recording industry, and
this new business model will be highly profitable.”
The Zomba Group of Companies, the world’s largest independent music company,
through its European venture capital division, bolstered its interests in
Beatnik. In March, Zomba and Beatnik announced a strategic partnership and
equity investment which enables Beatnik to promote and license a significant
portion of Zomba’s extensive music production libraries on the Web.

“We believe that Beatnik’s management team is uniquely qualified in terms of
creative talent, technical savvy and a deep understanding of the music
industry to lead the merger of music and the Internet,” said Brian Roberts, Zomba Music Publishing’s senior vice president of finance and commercial operations.

“Beatnik
is well on the way to becoming the ultimate one-stop Web site for all
synchronized audio needs.”