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Music streaming company is now valued at over $4 billion
Spotify is at it again: for the third year in a row the music streaming service has taken in a funding round of at least $100 million.
The company has now raised its biggest funding yet, worth $250 million and led by Technology Crossover Ventures, it according to a report from the Wall Street Journal on Thursday.
Spotify has previously raised nearly $300 million in funding, including $100 million Kleiner Perkins Caufield & Byers and Russian investment firm DST Global in 2011, and it took in $100 million from Goldman Sachs in November 2012. This latest round brings its total to $538 million.
A Spotify spokesperson would not comment on the report.
The money will reportedly be used to expand internationally, which is not surprising, given that Spotify has been launching its services around the world over the last year.
In April, the company made its first moves into Asia by launching in three countries on the continent: Hong Kong, Malaysia, and Singapore. It also launched in five other countries at the same time: Mexico, Estonia, Latvia, Lithuania, and Iceland.
In September, Spotify officially announced its launch in Taiwan, as well as the addition of its services in Greece, Argentina and Turkey. That brought the total number of countries with Spotify service to 32.
Spotify is going to continue to roll out in Asia: one of the next countries that the company is reportedly looking to expand to is Japan.
How committed is Spotify to Asia? Earlier this summer it stole away Sunita Kaur, Facebook's Director of Asia, to manage Spotify’s Asian growth, and to lead the region’s sales division out of Spotify’s Singapore office.
The news that Spotify was looking to raise new funding broke back in September, and at the time it was reported that the company was looking to be valued at $5.27 billion. The company seems to have fallen short of that goal, but it did manage to break $4 billion.
When Spotify raised its last round of funding, the company was valued at $3 billion.
The lower than expected valuation may be due to the company's losses. 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.
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.
Spotify is, of course, 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 (though that last one did not seem to work out very well).
This latest funding puts Spotify closer to Pandora's current $5.7 billion valuation, though it has a ways to go to reach its 70 million plus user base.
(Image source: https://www.digitaltrends.com)
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Pandora, the leading internet radio service, gives people music they love
anytime, anywhere, through a wide variety of connected devices: laptop and
desktop computers, smartphones, connected BluRay players, connected TVs,
etc. Personalized stations launch instantly with the input of a single “seed” –
a favorite artist, song or genre. The Music Genome Project®, a deeply
detailed, hand-built musical taxonomy, powers the personalization or
Pandora. Using this musicological “DNA” and constant listener feedback
Pandora crafts personalized stations from the more than 800,000 songs that
have been analyzed since the project began in January 2000.
More than 75 million people throughout the United States listen to
personalized radio stations for free on Pandora through their PCs, mobile
phones and devices such as the iPad, and connected in-house devices
ranging from TVs to set-top boxes to Blu-Ray players. Mobile technology has
been a significant factor in the growth and popularity of Pandora, starting
with the introduction of the Apple app store for the iPhone in the summer of
2008. Pandora instantly became one of the most top downloaded apps and
today, according to Nielsen, is one of the top five most popular apps across
all smartphone platforms.
Pandora is free, simple and, thanks to connectivity, available everywhere
consumers are – at the office, at home, in the car and all points in between.
In 2009 the Company announced that Pandora would be incorporated into
the dashboard in Ford cars via SYNC technology; GM has already followed in
announcing plans to integrate Pandora into its vehicles and Mercedes-Benz
introduced their Media Interface Plus device that works with the
free Pandora iPhone app to provide direct control of Pandora from in-dash
stereo controls. This was all great news for the millions of Pandora listeners
who had been plugging their smartphones into car dashboards to listen to
personalized stations while driving. More than 50 percent of radio listening
happens in the car, making it a crucial arena for Pandora.
Today tens of millions of people have a deeply personal connection with
Pandora based on the delight of personalized radio listening and discovery.
These highly engaged listeners reinforce the value Pandora provides to: 1)
musicians, who have found in Pandora a level playing field on which their
music has a greater chance of being played than ever before; 2) advertisers,
who benefit from the multi-platform reach of Pandora, as well as its best
practices in targeting consumers for specific campaigns; 3) the music
industry, which has found in Pandora a highly effective distribution channel;
and 4) automobile and consumer electronics device manufacturers, who have
noted that incorporating Pandora into their product makes it more valuable
Pandora continues to focus on its business in the United States. The radio
arena has never been hotter, thanks to technology that enables radio to be
personalized to the individual and more accessible than ever before. Right
now millions of people listen to Pandora in the United States and we hope
someday to bring Pandora to billions of people around the world.
• 2000 – Tim Westergren’s Music Genome Project begins.
• 2005 – Pandora launches on the web.
• 2008 – Pandora app becomes one of the most consistently downloaded
apps in the Apple store.
• 2009 – Ford announces Pandora will be incorporated into car
dashboard. Alpine and Pioneer begin selling aftermarket radios that
connect to consumers’ iPhones and puts the control and command of
Pandora into the car dashboard.
• 2010 – Pandora is present on more than 200 connected consumer
electronics devices ranging from smartphones to TVs to set-top boxes
to Blu-ray players and is able to stream visual, audio, and interactive
advertising to computers, smartphones, iPads, and in-home connected