Spotify financing to value the company at $3 billion

Since its official launch in October 2008, Spotify has helped to change the way we receive our digital music content. Yes, there are other services available like Pandora and Deezer, but Spotify is the service that most users seem to cite when they talk about streaming music.

Spotify is now closing in on $100 million worth of financing that would value the company at more than $3 billion. Multiple investors are stumping up the cash, but only Goldman Sachs has been identified as one of them so far.

Spotify completed a round of financing last year, raising around $100 million, to give the company a value of $1 billion. But the company is erring on the side of caution, pulling back its projected valuation of the company from $4 billion to $3 billion after this latest investment round.

Spotify is extremely popular, with more than 15 million active users, four million of them being paying subscribers. But the since 2010, they have lost $96.5 million, although revenue has been $344 million. PrivCo, a company that sells data on non-publicly traded companies, called the Spotify business model “unsustainable”, writing to its clients stating:

Something must change soon on Spotify's business model if the company is to survive.

Spotify launched its services in the US on July 14th 2011, grabbing 2 million subscribers by September.

Source: WSJ

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14 Comments

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I guess only through the greed of the record companies is something as simple, and popular as this, unsustainable.

I've been a paying premium customer for a couple of years now and use it on both my PC and mobile devices - I think I'd be mortified if it went away!

Peter van Dam said,
It's a really great service. I love it. Hope they can hire someone now to push the upgrade button so Spotify works on WinPhone 8.

this is hilarious, Spotify and Microsoft had a press conference together will Balmer there like 2 years (ok, exageration ;P) before the app actually was released.. might take a while

BGM said,

this is hilarious, Spotify and Microsoft had a press conference together will Balmer there like 2 years (ok, exageration ;P) before the app actually was released.. might take a while

Well, this time I'm not going to wait that long. I give them untill january before I seriously consider moving away to Xbox Music (that works like hell) or some other streaming service if available.

Peter van Dam said,

Well, this time I'm not going to wait that long. I give them untill january before I seriously consider moving away to Xbox Music (that works like hell) or some other streaming service if available.

I did it (moved away) one month ago and I can say nothing changed in my listening habits, even better, I discovered new sourcs of good music on the net. And GMusic on the phone with a 16GB mSD.

SuperKid said,

They have been told not to put those artists on Spotify otherwise they would be there.


I realise that. I know how it works. I'm just expressing my disappointment that Metallica or their management haven't got on board with music streaming yet