TuneIn Radio Service Explores Potential Sale

TuneIn Inc., the online radio service, has enlisted LionTree Advisors LLC to help the company evaluate strategic options, including a possible sale, according to Bloomberg.

The closely held company is also still evaluating whether it will need to raise money to acquire more audio programming and market its service.

TuneIn was valued at $500 million when it raised money last summer, but it’s expressed a willingness to sell for less than that sum, according to two people familiar with the matter who asked not be identified discussing private negotiations. Chief Executive Officer John Donham declined to address the company’s current valuation and said there are no active sale talks.

John Donham

“We are super early in conversations,” Donham said. “One option is to keep going as we’re going, and there are other options too. You don’t engage a banker if you’re not looking at them.”

Founded as a free way to listen to dozens of different radio stations over the internet, TuneIn spent the past couple of years building a paid service that includes live sports broadcasts and advertising-free music stations. TuneIn has signed up fewer than 10 million subscribers, Donham said, which makes it a fraction of the size of the two largest paid online audio services, Spotify Technology SA and Apple Music.

Consumption of online audio has exploded over the past decade -- from podcasts to music to live sports -- but few providers make any money. TuneIn isn’t yet profitable, though it’s not far off, Donham said. The 16-year-old startup, which has raised money four times in six years, could try to find a path to profitability without any additional capital, he said.

TuneIn has carved out a niche for itself as a top online radio service, alongside Pandora Media Inc. Unlike Pandora, which is primarily a music service, TuneIn also offers sports talk and news. The service streams tens of thousands of radio stations and millions of podcasts for free.

But the money flowing into subscription-based audio services dwarfs the market for advertising-supported internet radio. Spotify is a case in point. It generates more than 90 percent of its sales from premium-music subscriptions, even though the majority of its users listen for free.