Report: Spotify Raises Half Billion To Compete With Apple
June 10, 2015 at 12:45 PM (PT)
SPOTIFY has responded to APPLE's announcement of a new music streaming service by announcing it has raised $526 million in equity funding to duel it out with its free-spending U.S. rival, according to a report in the NEW YORK POST.
SPOTIFY, reportedly worth $8.5 billion based on the equity stake sold to investors, announced earlier today that it had 75 million users -- including 20 million who pay a $9.99-a-month subscription fee.
The webcaster posted on its blog, "What a difference a year makes! At the end of MAY 2014, we reached 10 million paying subscribers and 40 million active users. Today, we have reached more than 20 million subscribers and more than 75 million active users. Ten 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."
SPOTIFY adds, "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. We have now paid more than $3 billion USD in royalties, including more than $300 million in the first three months of 2015 alone."
The cash raised by SPOTIFY could be used to expand, both geographically, and in forms of content, such as video and podcasts, according to the report.
SPOTIFY’s latest investors include STOCKHOLM telecom giant TELIASONERA, BRITISH financiers BAILLIE GIFFORD, LANDOWNE PARTNERS and RINKELBERG CAPITAL as well as CANADIAN hedge funds SENVEST CAPITAL and DISCOVERY CAPITAL MANAGEMENT, according to DOW JONES.
U.S. investors in the round include HALCYON ASSET MANAGEMENT, GSV CAPITAL, D.E. SHAW & CO., TECHNOLOGY CROSSOVER VENTURES, NORTHZONE AND P. SCHOENFELD ASSET MANAGEMENT.
GOLDMAN SACHS, brought in by SPOTIFY to raise funds, also invested through its GLOBAL PRIVATE OPPORTUNITY PARTNERS fund. Global Private Opportunity Partners fund. ABU DHABI's sovereign-wealth fund also signed on to invest in the round in APRIL.
The $8.5 billion valuation for SPOTIFY is more than double the $3.6 billion valuation for rival PANDORA.
SPOTIFY is celebrating having reached 20 million subscribers and more than 75 million active users.