Best Buy Funding Digital Media Firms
By Alan Wolf -- TWICE, 5/28/2009
Minneapolis — Best Buy has launched a strategic equity investment fund to help bankroll digital media startups.
The new fund will invest in companies developing applications for digital music, video and gaming, personal media management, and “other areas that leverage the touch points and reach of Best Buy,” said Fuse Capital, the retailer’s partner in the venture.
Fuse, formerly Velocity Interactive Group, will also work closely with Best Buy on digital media strategies and will support the retailer’s existing digital assets, it said.
The latter include Napster, the music-download and streaming site that Best Buy bought last year for about $121 million.
“This partnership is another example of how we strive to be at the forefront of consumers’ entertainment and digital lives,” said Mike Vitelli, Best Buy’s customer operating groups executive VP. “We … look forward to working with [Fuse] to lead the market transformation in digital media.”
The fund is Best Buy’s second venture capital vehicle following last year’s launch of Best Buy Capital. The in-house operation invests in emerging and potentially disruptive technologies as a hedge against the retailer’s mass-market orientation, the company said, and recently led a fourth round of funding in IMVU, which operates an online 3D virtual community.
Fuse noted that the new fund’s investments will “complement … Best Buy’s current digital media and emerging technology investment activity.”
Said Fuse managing partner Ross Levinsohn: “Best Buy is the preeminent retail leader in technology and entertainment products and services, and is exceedingly well positioned to take advantage of the massive shifts occurring across the media and commerce landscapes.”
