Spotify reportedly near financing round for a $3B valuation
The music-streaming service has almost finalized a fresh round of financing at $100 million, sources tell The Wall Street Journal.
Spotify is close to closing a $100 million financing round that would value the company at a little more than $3 billion, sources tell The Wall Street Journal.
The capital would come from multiple investors, including Goldman Sachs, although the Journal did not identify who the other investors were.
CNET has contacted Spotify for comment and will update this report when we learn more.
In a funding round last year, the music-streaming service raised about $100 million from venture capital firm Kleiner Perkins Caufield & Byers and Russian investment firm DST Global, to give it a $1 billion valuation. More cautious now like many Internet startups, the company has pulled back on its ambitious valuation target of $4 billion.
While the company boasts more than 15 million active users and 4 million paying subscribers, its financial performance for 2011 has suffered. As revenue increased 151 percent from 2010, losses widened 60 percent for the same period, according to PrivCo, a company that sells data on non-publicly traded companies.
Spotify, which was cofounded by CEO Daniel Ek in 2006, reported a net loss for 2010 of $37.5 million on $97 million in revenue. For 2011, the company's revenue increased to $244 million, but losses also widened to $59 million, PrivCo reported.
Last month, PrivCo called Spotify's business model "unsustainable" and wrote to its clients that "something must change soon on Spotify's business model if the company is to survive."