The company now has 20 million subscribers and more than 75 million active users
Apple's big debut of its music service on Monday isn't going exactly as planned. First, reports have come out that the company is being investigated for potential anti-trust violations. And now it is about to be overshadowed by its biggest competitor in the space.
Spotify has just raised a massive new funding round, according to a report out from the Wall Street Journal on Wednesday, to the tune of $526 million, valuing the company at $8.53 billion. A Spotify spokesperson has confirmed the round to VatorNews.
This is the first funding the company has raised since its $250 million round in November of 2013. That round brought its total funding to $538 million. This latest round gives the company well over $1 billion in venture capital.
Investors in the round include British asset managers Baillie Gifford, Landsdowne Partners and Rinkelberg Capital; Canadian hedge funds Senvest Capital and Discovery Capital Management, Halcyon Asset Management, GSV Capital, D.E. Shaw & Co., Technology Crossover Ventures, Northzone and P. Schoenfeld Asset Management. Goldman Sachs invested through its Global Private Opportunity Partners fund and Abu Dhabi’s sovereign-wealth fund also invested.
So far, only one investor has made their participation in the round public: TeliaSonera has revealed that it has invested $115 million for a 1.4 percent stake in Spotify.
The two sides are also partnering for what they are calling a "joint innovation agenda," which means "committing resources, staff and other assets" to areas that include "media distribution, customer insights, data analytics and advertising." A joint TeliaSonera-Spotify team will be set up specifically to run these projects.
A spokesperson for Spotify would not comment any further on what the ultimate goal of this partnership might be.
In addition to the new funding, Spotify has also decided to release some new numbers, revealing in a blog post that it now has more than 20 million subscribers and more than 75 million active users. The company had 40 million active users in March of 2014 with 10 million of them paying, meaning it has been seeing big growth in the last year.
"10 million subscribers in our first five and a half years – and another 10 million subscribers in just a single year! That’s an average of one new subscriber every three seconds over the last year. Wow," the company wrote.
Spotify had 15 million paying subscribers, out of 60 million total, in January.
The company also took the opportunity to address one of the more contentious issues that has arisen for Spotify, and many of its competitors, in the last few years: royalties and how much artists get paid. That issue blew up earlier this year when Taylor Swift, one of the world's top artists, took her music off the service, and subsequently blasted the company for not respecting the artists on its platform.
The company revealed that is now paid more than $3 billion in royalties. That includes more than $300 million in the first three months of this year alone.
"More people listening on Spotify means more payouts to the creators of the music you love. As we grow, the amount of royalties we pay out to artists, songwriters and rights holders continues to climb faster than ever," Spotify wrote.
In one fell swoop, Spotify was able to not only take the wind out of Apple's sails, but also it also took it right to those people who basically accuse it of ripping off artists.
Welcome to the music streaming space, Apple. Get ready for some heavy competition.
(Image source: mashable.com)