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.