Since finally coming to the U.S. last year Spotify has grown into the premiere free online music service, with over 15 million active users. There is increased competition in the space, though, from companies like Microsoft, Nokia and Apple, and Spotify has to try to keep out in front of those nipping at its heels.
To stay ahead of the pack, the company is about to close a round of financing that will bring in over $100 million, the Wall Street Journal reported Friday. The latest financing, from multiple investors including Goldman Sachs, would value the company at $3 billion. No other investors were named.
If this news is true, then Spotify will actually be valued lowered than previously reported. In May, the New York Times reported that Spotify was looking to raised $220 million for a $4 billion valuation.
The U.K.-based service was launched in 2006 by Chief Executive Daniel Ek, who has said that the company could make up to $900 million in revenue in 2012. It first became available in the United States in July 2011, and has seen massive growth since.
In July, Spotify reached four million paying subscribers, growing from only four million users total to 15 million users in just ten months.
As the Journal points out, despite its impressive growth, Spotify has some issues, including its dependence on record labels providing content through contracts.
The last time Spotify raised any money was $100 million from Kleiner Perkins Caufield & Byers and Russian investment firm DST Global in 2011, at a $1 billion valuation.
VatorNews contacted Spotify, but it could not be reached for comment.
Many other big name companies are getting into the music streaming service, including Microsoft, Apple and Nokia.
In September, Nokia launched a free music streaming service available for customers who own a Lumia handset. Users are encouraged make their own playlists, using the Create feature, which will give them access to millions of songs in Nokia’s MP3 store. When a user chooses an artist or a song, The Echo Nest builds a station around that artist, generating a playlist.
In addition to the generated playlists, Nokia Music app also features over 150 playlists, including some created by well-known artists, including Lana Del Rey, Lady Gaga and Rihanna.
Nokia Music also offers the Gig Finder feature, which customers can use to find concerts and shows based on their location.
Last month, Microsort unveiled Xbox Music, which was launched first on the Xbox console, then onto Windows 8 when it debuted on October 26.
Like Spotify, Xbox Music offers free on demand streaming access to its 30-million catalog of songs in the Xbox Music Store, where users can buy single tracks or entire albums.
Xbox Music also has a feature called Smart DJ, which works very much like Pandora, in that it allows users to create instant playlists based on their favorite artists or songs.
Microsoft says that it has a few features coming up in the next year, including a scan-and-match feature, as well as social features.
Microsoft previously attempted to enter the music world with its failed Zune media store.
It was also reported in September that that Apple was in negotiations with music labels to create an Internet radio service, much like Pandora.
It was also reported in September that that Apple was in negotiations with music labels to create an Internet radio service, much like Pandora, though it was said that it would take months for Apple to have everything in place to launch such a service.
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