Report: Spotify raising funds at $5.3B valuation
Streaming music platform Spotify is raising money at a valuation of $5.27 billion, according to a report in Swedish financial publication Dagens Industri.
The report states Spotify co-founders Daniel Ek, who serves as CEO, and Chairman Martin Lorentzon are seeking to raise a loan instead of an equity investment due to their reluctance to give up more of the company to venture partners. Spotify has not responded to requests for comment.
Spotify has raised $288 million to date, including a $100 million round completed last November. At that time, the startup was valued at an estimated $3 billion. TechCrunch notes that when Spotify published its most recent financial reports in July 2013, it posted a loss of $78 million against revenues of $577 million.
Spotify offers listeners streaming access to more than 16 million songs via applications for operating systems including Apple's (NASDAQ:AAPL) iOS, Google's (NASDAQ:GOOG) Android and Microsoft's (NASDAQ:MSFT) Windows Phone. The apps are free to download and include 30 days of free service, but once the trial ends, consumers are charged $9.99 per month to access the full slate of services.
Spotify is available in 17 countries and touts more than 24 million active users across all platforms. In some markets, close to 20 percent of users have converted to premium services. Although Spotify has drawn criticism from performers who maintain that the digital music platform fails to adequately compensate their efforts, the company has said it awards 70 percent of all revenues back to music rights holders and in July stated it is on pace to pay out more than $1 billion to recording artists by the end of 2013.
- read this TechCrunch article
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