Word has it that Spotify is about to get a lot richer. The music-streaming service is rumored to be raising between $500 million and $600 million from investors, according to The Wall Street Journal. That amount of cash could boost the company's total funding to more than $1 billion.
Spotify is said to be in talks with Goldman Sachs about the new round of funds, sources familiar with the matter told the Journal. If the music service does raise this money, it could delay a possible initial public offering until next year.
Since coming on the scene, Spotify has competed neck and neck with similar services, like Pandora, Rdio and Google Play Music. It's risen to become one of the more prevalent services and announced earlier this month that it had reachedand 60 million active users worldwide -- that's a 50 percent increase from last May. This big user base and surge in popularity has likely wowed investors.
Spotify reportedly told investors that if they backed the company it would give them a guaranteed return once it has its IPO, according to the Journal. Last year it was rumored that Spotify wasafter it reportedly took out a $200 million line of credit from major banks that could eventually become its underwriters.
A key component in Spotify's growth has been its willingness to let users stream music to mobile devices for free. Spotify's paid service costs customers $9.99 per month and allows for offline listening, no ads and improved sound quality. The company pays roughly 70 percent of its revenue for royalties to artists and companies that hold the rights to the music.
Spotify is currently valued at more than $5 billion, according to the Journal. So far, it's raised $537.8 million in seven rounds of funding from 17 investors, including Kleiner Perkins Caufield & Byers, Accel Partners and Goldman Sachs.
A Spotify spokesperson decline to comment on the possible new round of funding.