Spotify closes new round of funding for $100 million
Spotify has closed a new round of funding for $100 million that would give the streaming music service a valuation of about $3 billion.
The popular Swedish music service, which launched in the United States in 2011, has attracted investment from Goldman Sachs Group Inc. and Fidelity Investments, a person familiar with the situation confirmed. Coca-Cola Co. also took a small stake, the person said.
The investments were first reported in the New York Times.
Coke and Spotify formed a partnership last April that gave the burgeoning music-streaming service access to Coca-Cola’s global marketing engine to help it grow internationally. The beverage company, meanwhile, gained access to Spotify’s music catalog for its online marketing.
The infusion of capital comes in the wake of reports that the bigger Spotify gets, the greater its losses become.
PrivCo, a financial data company, obtained the privately held Spotify’s financials. It found that while the service’s revenue grew to $244 million last year, up 151% compared with 2010, virtually every dollar of revenue went to the music companies in royalty payments. PrivCo estimated Spotify’s losses at $59 million.
Spotify offers a basic free online music service and also sells premium $10 monthly subscriptions that provide commercial-free listening and access across multiple devices. The on-demand service has about 15 million active members in more than 15 countries.
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