Update: Bloom.fm will try to find a buyer before closing its music streaming service

Update: Bloom.fm isn’t going down without a fight. In an interview with Music Ally, chief executive Oleg Fomenko said the startup will be running a 7-10 day bidding process in an attempt to find a buyer.

“We’ll see who bites,” he said. “It has to happen fairly quickly, because we are literally nearly out of cash. But it’s a lot more attractive to a potential buyer because it’s effectively a fire sale. If somebody can get Bloom.fm for a fraction of what it is actually worth because of this situation, that’s a pretty good deal.”

Bloom.fm is shutting down its mobile-focused music streaming service, after its investor “unexpectedly” cut off funding.

In a short statement, the company said it was “shell-shocked” and unable to find new investment at such short notice. The company described its fortunes as “poetically crappy” after surpassing over a million registered users in the UK.

“A massive thanks to everyone that helped us get this far,” it said. “We’re absolutely gutted. But it’s been a real pleasure.”

Earlier this month, Bloom.fm claimed it was blocked from using Apple’s iAd mobile advertising network because its service was in direct competition with iTunes Radio, which is expected to launch in the UK shortly.

Bloom.fm launched its iPhone app in January last year, before supplementing it with an Android version last September. The music streaming service was only available in the UK, but differentiated with a novel pricing structure. Alongside free internet radio and on-demand streaming for £10 per month, Bloom.fm offered two “music locker” tiers at £1 and £5 per month. With these, listeners could “borrow” a limited number of tracks for playback.

A web player was also in development.

➤ Blog Post [via VentureBeat]

Image Credit: ROLAND WEIHRAUCH/AFP/GettyImages