According to several sources close to the situation, music discovery app Shazam is close to raising $20 million from investors, some new, at a $500 million valuation.

The number is significantly larger than its most recent round last summer, which came just after it also got a new CEO — former Yahoo exec Rich Riley.

The London-based Shazam now calls itself a “media engagement” company, with its app downloaded by hundreds of million of users across the globe. When Riley was hired, the company said it had 60 million monthly active users, who install it on their smartphones to identify songs based on how they sound, via tagging of its many millions of tracks.

Shazam said it now has 88 million monthly active users.

That boost has come, in part, from a new television service that has a range of features such as finding music in the broadcast, providing cast photos and a variety of other show information and linking to sites with more data or to those with show-branded merchandise, previous episodes or the ability to rent or buy programming. Shazam is also offering a form of “clickable” advertising that links users to rich brand content, and is working on new tablet apps, too.

Shazam is certainly well funded, having raised $32 million in venture funding from investors such as Kleiner Perkins, Institutional Venture Partners, Acacia Capital and DN Capital.

In its last round last summer, it raised another $40 million in funding, half of which was for secondary sales to early employees and investors, from Carlos Slim’s Mexico City-based company, America Movil.

As part of the deal, the Latin American wireless giant promised to pre-load Shazam onto mobile phones in the regions in which it operated.

But its business depends a lot now on affiliate revenue from Apple, Google and others, and its TV efforts are still in the early stages.

As Jason Del Rey noted last year:

While Shazam gets a cut of the $300 million in affiliate music sales its app users purchased in the last 12 months, it is focusing a lot of energy on pitching TV advertisers on its service. This is a tricky proposition, though.

The beauty of the main music-discovery feature of the app is that it allows you to get the name of a song you simply can’t identify in another way. But when you are watching television, you can most likely identify the show (or can simply click “info” for that information) and commercial you’re watching, so it’s not nearly as serendipitous of an experience. Still, Shazam is trying to make this transition by delivering additional content about both shows and TV commercials to the mobile app.

Yet it’s nearly as simple for a person to just Google an advertiser or type in a URL if they really want to act on that commercial right then and there. In that way, Shazam for TV has similar challenges to the rest of so-called second-screen apps: Twitter and, to some extent, Facebook have started to dominate the online conversation around television programs and commercials, leaving limited market space for other players.

Riley’s answer to this predicament is that brands should be advertising on Shazam in addition to these services, that there’s a population that discovers on Shazam that doesn’t do so on social networks. Advertisers can customize their Shazam campaigns to deliver any type of content they want when a viewer “Shazams” a commercial.

Shazam declined to comment on any fundraising.



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