Stay on Top of Emerging Technology Trends Get updates impacting your industry from our GigaOm Research Community

Palo Alto, California-based TuneIn has raised a new $25 million round of funding, and it plans to put that money to good use. TuneIn CEO John Donham told me Tuesday that he intends to spend a big chunk of his new funding on a monetization strategy that could help radio broadcasters finally make money with their programming online, and in turn transform a $30 billion industry.

To help him with that task, Donham has also brought Axel Martinez as the company’s new CFO on board; Martinez previously worked ten years for Google, (s GOOG) most recently as Assistant Treasurer, Head of Capital Markets.

TuneIn is offering access to live and on-demand programming from some 70,000 radio stations, and Donham said that the service has seen a huge uptake on usage in recent months: TuneIn users streamed more than one billion hours of programming during the first four months of this year, he told me, and the company is now seeing more than 40 million active users per month. Growth is especially pronounced on mobile devices, where the company now sees the majority of its use.

TuneIn now wants to make money on all those listeners, but Donham said that monetizing radio isn’t as easy as it may seem. In fact, many broadcasters are utterly unprepared.

“Suddenly, a local radio tower can reach a global audience,” said Donham, explaining that it’s easy for a broadcaster in San Francisco to reach a listener in New York these days. Serving that listener with ads that are actually relevant to him is much harder, in part because that San Francisco broadcaster doesn’t have anyone selling ads for him in New York.

Donham didn’t want to go into too many details about the solution his company is working on, but to me, it sounded like a kind of ad exchange that would allow New York broadcasters to not only sell ad inventory for their own stations, but also that broadcasters in San Francisco who happens to have listeners in New York.

So why not offer broadcasters a way to make money with their content through subscriptions instead? “One of the compelling value propositions of radio is that it is free,” Donham told me, adding that he wants to keep it that way: “We want to further the value proposition of radio.”

Including the most recent round, TuneIn has raised a total of $47 million. The new funding was led by Institutional Venture Partners, with existing investors Sequoia Capital, Google Ventures, and General Catalyst Partners joining in on the round.

Image courtesy of Flickr user C.P.Storm.