Spotify gets $250M payday led by Silicon Valley investment firm
The investment led by Technology Crossover Ventures values the upstart streaming-music service at more than $4 billion, according to a report.
Spotify nailed down an investment of $250 million -- close to half its revenue all last year -- that values the streaming music service at more than $4 billion, according to a report Thursday by The Wall Street Journal.
Talks between Spotify and Technology Crossover Ventures, the firm that led the round of funding, over a potential $200 million investment were reported earlier this month by Sky News.
A Spotify spokesman declined to comment.
Spotify is growing rapidly and spreading quickly across the world from its home base in Sweden -- and burning through cash to do it. Spotify's revenue last year surged to about 435 million euros, or about $588 million at current rates, from just 190 million euros the year before, but.
In March, Spotify said it had surpassed 6 million subscribers, a gain of 1 million since December, making it the fastest-growing digital music company ever and second in reach to Pandora. But both Pandora and Spotify are burdened by the high cost of music licensing. In Spotify's case, the company pays an estimated 70 percent of its sales to rights holders through direct deals with music labels and publishers.
Another $250 million in the coffers will keep fueling Spotify's expansion mission and shows CEO Daniel Ek is able to convince investors of his goal to make Spotify the, even if the majority of Internet music listeners in the US still aren't.