H2O Audio Gets More Steelpoint VC Funding

San Diego-based H2O Audio has raised more than $1.7 million in venture funding. Among other things, the startup plans to use the capital to roll out a new product line of its waterproof housings and headsets for the Apple iPod and MP3 players.

H2O Audio CEO Kristian Rauhala told me today that $1 million of the total was part of an earlier $6 million commitment that Steelpoint Capital Partners made to the company, and $756,250 was in additional funding. Steelpoint has been H2O’s sole backer since Southern California’s Tech Coast Angels provided early stage funding in 2004.

CEO Kristian Rauhal

CEO Kristian Rauhala

H2O Audio’s cases and related products are designed for use in surfing, kayaking, diving, and other action sports. H2O has recruited U.S. Olympic gold metalist swimmer Natalie Coughlin and big-wave surfer Laird Hamilton, who is a member of H2O Audio’s board of directors, for its marketing campaign. “We bring music to sports. Your sport, your music. Our mission is to establish the H2O brand even further,” Rauhala says.

Rauhala says H2O Audio currently has 15 employees. He’s planning a new H2O product roll-out  this summer. The company, which already sells its products through BestBuy and at Apple stores, plans to begin selling at Target as well. Rauhala, who is an avid surfer, founded the company in 2002. He’s a former Nokia manager in Finland and a former regional manager for Elektrobit in San Diego.

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