PodShow raises $15M more for….podcasting. Yikes!

Podshow, a company that promotes podcasts and finds sponsors for them, has raised $15 million more in a second round of venture capital from its big-name investors, following up on $8.85 million in a first round last summer.

Dan Primack has the scoop.

This is, frankly, surprising, because the business model still hasn’t been proven for this medium. This is a lot of money. There are other players out there, too, like Odeo (funding from Charles River & others) and Podtech (raised $5.5M from USVP & Venrock).

But then a number of investors see a land-grab going on here, an effort to be the primary destination where thousands of individual musicians and other content producers will come to provide their wares, and where millions of listeners will want to download them. We just saw Digg founders launch Revision3 to go for this market in the video area. And like Podtech, Podshow is working with bigger companies — in PodShow’s case, mainstream media companies — to help them produce and distribute podcasts. PodShow is also buying up other podcasting companies, so the cash could be meant for buying up more sites to become the biggest player. Its programming is extensive.

Still, we agree with Dan’s skepticism, as the whole premise of the Revision guys (they raised only $1M, see link above) is that it really cheap to launch these sorts of services. According to Dan:

I just struggle to see venture-type [return on investment] for most of these deals, unless they can be flipped before Yahoo, Google, etc. put down their tall glasses of content Kool-Aid. This isn’t to say that the podcasting market is inherently unprofitable, because it isn’t. VC-backed companies, however, are supposed to produce something a bit more exciting than respectable margins.

Some VCs agree with me, but it is clear that many others do not. Case in point is PodShow inc., which recently raised $15 million in Series B funding. This follows up on an $8.85 million Series A deal from last summer, from Kleiner Perkins, Sequoia Capital, Ram Shiram and Jerry Newman. All four are back this time around, but an undisclosed lead came aboard at a major pre-money valuation step-up.