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Spotify's value has gone up 75%, from $3 billion, in less than a year
Less an a year after pulling in $100 million for its fifth round of funding, it looks like Spotify is at it once again, looking to raise another round to fuel its growth for the third year in a row.
The music streaming service is looking to raise an unspecified amount of new funding, at valuation of 35 billion kronor, or $5.27 billion, according to a report in the Swedish financial paper Dagens Industri this week.
The two founders of the company, CEO Daniel Ek and chairman Martin Lorentzon, are also reportedly reluctant to relinquish more of the company, and so may be looking to take out a loan, rather than take an equity investment.
When Spotify raised its last round of funding, the company was valued at $3 billion, meaning its has seen its value rocket 75% in just 10 months.
Spotify has raised nearly $300 million in funding, including $100 million Kleiner Perkins Caufield & Byers and Russian investment firm DST Global in 2011, and the aforementioned $100 million from Goldman Sachs in November 2012.
The company has more than 24 million active users and over six million paid subscribers. Since its launch in 2008, Spotify says it’s driven more than $500 million to rights holders and expects to drive another $500 million in 2013. The service is available in 28 countries around the world.
Despite these impressive numbers, Spotify is in a very competitive market, with services like Pandora and Songza already established, and companies like Microsoft, Apple, Nokia, Google and even Twitter trying to carve out their own piece of the pie. Pandora recently hit 200 million users, doubling its userbase in two years.
So Spotify has been trying to keep ahead by expanding to new markets, notably in Asia, and unveiling new features. Earlier this week the company debuted Spotify Connect, which allows users to stream Spotify on any device, including a wide range of speakers and home audio systems from companies like Philips, Denon, Revo and Yahama.
But the company's need to stay ahead of the competition has had a price: the company has never been profitable.
Despite taking in $578 million in revenue during 2012, an increase of 128% from the year before, the company also lost $78 million, up from $60 million the year before, according to the New York Times.
Still, this does not seem to have detered investors. As long as the company continues to prove it can remain at the forefront of a hot space, the company seems to have no trouble raising capital.
A Spotify spokesperson would not comment on the report.
(Image source: https://thenextweb.com)
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