Musicunsigned.com is the next internet play to be released on to Aim. Touting itself as a business-to-business internet platform to promote new artists, this outfit has raised £3.25 million from a placing at 9p ahead of its flotation on Thursday. Roxanna Mohseni reports.

Marketing director Simon Robinson boasts,'we're proud to call ourselves an internet company, but at the moment we don't believe that selling music on-line is worthwhile'. This attitude towards the impact of the internet on the music industry has inspired a different, though rather fragmented, business model.

Musicunsigned's team evaluates the demos sent in by aspiring musicians and then streams the best tracks over the web. The target audience is the bigger music corporations, which can use this site to source new acts and develop them into major bands. Robinson claims that to date about 20 bands have signed a record deal as a result of their exposure on musicunsigned.com.

Alongside this core activity, Musicunsigned has set up a publishing company and a record company, an exercise which Robinson likens to the model of internet incubators: 'we only need one really big hit to cover our losses [from less successful acts]'. An internet radio station is scheduled for launch later this year as a promotional platform and content provider.

Initially, revenues will be generated through advertising and sponsorship. In the longer term, the intellectual property rights are the significant earners. Musicunsigned will receive royalties and performance fees from its successful acts from across its promotional, publishing and recording activities.

Management is brimming with experienced people from the music industry; 'We are not your average city bods', admits chief executive Aroon Maharajh. Public company know-how is provided by non-executive chairman Oliver Vaughan, of internet incubator and 12 per cent shareholder, eVestment. Stephen Dean's VoyagerIT.com is majority shareholder with a whopping 22.5 per cent and no lock-in clause.

Finance director Jonathon Griffith expects the group to reach break even point in 2002. However, given the risky nature of a music industry dominated by majors and requiring substantial marketing expenditure, investors should approach this outfit with caution.