TuneIn: The Sequoia-Funded Radio App With More Usage Than Pandora or Spotify

It’s getting harder to find a diamond in the rough among Internet start-ups. Investors hurry to hand out seed funding. No press release seems too small to get picked up by a blog or two. Baby companies even get coverage when they’re accepted to start-up accelerators.

But here’s a contender: TuneIn is a radio app that gets more usage on iPhone and Android than Pandora or Spotify, according to a recent study.

In fact, TuneIn told AllThingsD last week, in October it had 30 million active users listening to 58,000 different stations from all over the world, with 200 new streams, podcasts or on-demand channels added every day.

Palo Alto, Calif.-based TuneIn is not your average start-up. It was founded in 2002 in Dallas as RadioTime, and for years built an online directory for radio stations that was available through partnerships with makers of devices like the Logitech Squeezebox and Sonos.

Then an outside developer made a popular iPhone app called TuneIn that used the directory to help users stream and record radio on their phones.

RadioTime bought TuneIn last year, and renamed itself and its radio apps for nearly every phone, living room and car app platform. Some 150 of those platforms have TuneIn available now, many of them preinstalled.

TuneIn users can browse among stations and genres; they can also search for an artist or song to find stations that are currently playing it. Most of the apps are free, but on iOS, Android and BlackBerry, users can pay for a pro version that lets them record what they’re listening to.

Late last year, Sequoia Capital secretly invested $6 million in the company and moved it to California. In recent months, it helped find a replacement for the longtime CEO with gaming industry vet John Donham. Donham most recently co-founded Metaplace and sold it to Disney, where he ran technology and product operations for Disney Interactive Media Group.

Donham (pictured below) said in an interview last week that he was happily going about his business at Disney and about to blow off a call from Sequoia’s recruiter because he’d never heard of TuneIn, when he realized he already had the app installed on his phone. Then he looked at some of the glowing TuneIn app reviews from people listening to their hometown radio from halfway around the globe. And then he got a look at the usage stats.

“There’s nothing viral about TuneIn,” Donham recalled thinking. “How did it get to millions of people with no viral and no marketing?” He joined in August.

Of course, there’s a good reason that Spotify and Pandora get more love than TuneIn. They’re creating new music discovery experiences, rather than simply translating existing radio content for a new medium. And they are personalized and social.

(This weekend, while listening to a random pop station on TuneIn at the gym, I heard its local ads for a laser hair removal shop in Minnesota. It’s probably not going to be getting my business anytime soon.)

But while apps like Spotify and Pandora may be shiny and better-known, Donham said, radio is still the top way people find new music.

For now, TuneIn doesn’t add its own advertising, though that will probably come, Donham said. The company is starting a campaign this week with listener-funded stations — like its local KQED — to solicit donations from listeners directly within its apps. It will also soon add discovery and sharing features.

Update: This story was updated to reflect that Sequoia Capital’s investment came in 2010.