Budgeting, Planning & Forecasting

Budgeting, Planning & Forecasting

February 22, 2011

Spotify Valued at $1 Billion, Gets $100 Million in New Investments

Spotify (News - Alert) – a streaming music provider based in Europe – is going to be getting about $100 million in new investment funds, according to media reports.

TechCrunch said Spotify is close to closing a round of financing. Digital Sky Technologies (DST) is reported to be leading the investment round. DST is the same firm that invested in such successful companies as: Facebook (News - Alert), Groupon and Zynga.

For this deal, Spotify has been valued at about $1 billion, according to TechCrunch.

Sky News is also reporting that Kleiner Perkins Caufield & Byers, a venture capital firm, has taken a stake of 5 percent in Spotify, according to DMW Media.

Spotify has raised at least 82.3 million Euros (about $112 million) from investors so far.

A 2009 investment round had valued the company at about 200 million Euros (about $273 million).

In addition, Spotify has signed deals with two major record labels for its planned U.S. launch, according to DMW Media.

Spotify's service is available for users living in the United Kingdom, Sweden, Spain, Norway, Finland, France and the Netherlands.

It had 10 million users as of September 2010. Some 750,000 of them were paying subscribers, reports DMW Media.

In other company news, Spotify recently announced on its blog that Spotify on Squeezebox is now available to users.

Logitech (News - Alert) has released a new software update for the Touch and Radio which adds the Spotify app, according to the blog post.

A Spotify premium subscription, and a Radio or Touch are required. The solution will allow users to stream through a Squeezebox throughout a house.

TMCnet said that the release was an important step for Spotify. “Analysts and industry-watchers have consistently said that iTunes’s success has been driven in large part by its close integration with Apple’s (News - Alert) iPod hardware and that Spotify must adopt a similar approach if it is to see similar success,” said a report in The Telegraph newspaper, quoted by TMCnet.

Spotify was supposed to launch its product in the United States in 2010, but ended up delaying the release, TMCnet reported.

Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Janice McDuffee

blog comments powered by Disqus