The cloud-based music service has received an undisclosed amount of new investment from rock star Peter Gabriel, US technology giant Qualcomm, and venture capital firms Eden Ventures and Pentech Ventures. GP Bullhound provided corporate finance advice on the funding round.
We7 said that the cash injection will fund its expansion plans in 2011 and 2012, including growth in its UK team and expansion into "multiple countries" across Europe. The ambitious company also hopes to set its sights on "locations further afield" in the future.
Founded in 2006 by John Taysom, Gareth Reakes, Steve Purdham and Peter Gabriel, the website was officially launched in the UK in November 2008.
The service enables users to listen to music for free as long as they agree to hear regular audio adverts, as well as create radio-style webcasts tailored to their tastes.
We7 boasts 3 million monthly unique users in the UK, and the majority of its revenue comes from advertising, followed by subscription tiers and an MP3 store.
Expansion into Europe would see the site go head to head with rival streaming service Spotify, which is the market leader with 10 million users, including 1m paid subscribers.
We7 chief executive Steve Purdham said that the industry is on the cusp of "seeing a massive change in how people consume music".
"In the next 24 months digital music listening will move rapidly from the early adopters and music obsessives we have seen to date, into the mass market and general music listening communities," he said.
"This change represents an outstanding global opportunity to create a highly valued business for consumers, the music industry and We7."
Purdham added: "Over the coming months, We7 will be announcing key partnerships alongside expansion plans into Europe.
"These developments will allow us to showcase what We7 can do by expanding the familiar medium of radio as a digital backbone to additional services we'll be offering."
In March, a consortium of partners, including We7, digital agency Somethin' Else and BT, was awarded £1.8m in government funding to develop a new cloud radio project.