Spotify closing in on $400m of new financing

Spotify is reportedly on the verge of securing US $400m in new investment, thanks to a funding round led by Goldman Sachs and an Abu Dhabi sovereign wealth fund.

According to the Wall Street Journal, the new money would value Spotify at $8.4bn, and will be confirmed in the next few weeks.

The timing couldn’t be better for Spotify, with an expensive battle on the horizon with Apple for consumer attention. Apple is set to unveil its on-demand music streaming service in June.

Despite Spotify’s position as a direct competitor, the news of Spotify’s valuation lifted Pandora’s share price by 5% on Friday.

Spotify’s previous investors have included Goldman Sachs, Accel Partners, Kleiner Perkins Caufield & Byers and Coca-Cola Co.

The major labels – Universal Music Group, Sony Music Entertainment and Warner Music Group – are believed to own around 15% of the company.

As you can see below, the company has pulled in more than $500m in outsider financing since launching in 2008.

Spotify: investment rounds to date

  • November 2013: $250m – Technology Crossover Ventures
  • November 2012*: $100m – AFSquare, The Coca-Cola Company, Fidelity Ventures, Lakestar, Goldman Sachs
  • June 2011: $100m – DST Global, Kleiner Perkins Caulfield & Byers, Accel Partners
  • February 2010: $12.3m – Founders Fund, Sean Parker
  • August 2009: $50m – La Ka-shing, Horizons Ventures, Wellingtons Partners
  • October 2008: $21.6m – La Ka-shing, Creandum, Northzone, Horizons Ventures

* An additional funding round is believed to have taken place in 2012 for an undisclosed amount.

 Music Business Worldwide

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