European music streaming service likely to announce US rollout within weeks after securing $100m in fresh investment
Spotify has raised $100m (�61m) in a funding round that values the European music streaming service at $1bn ahead of its imminent US expansion.
The Anglo-Swedish company this week sealed its biggest funding round yet with Facebook investor Digital Sky Technologies, Twitter backer Kleiner Perkins and Accel.
The funding round has been interpreted as a sign that Spotify's long-delayed US rollout could be announced within weeks.
Spotify has reportedly finalised deals with three of the four major music labels ? Universal Music, Sony Music and EMI ? with Warner Music apparently close to sealing terms.
Since its 2008 launch, Spotify's free online jukebox has attracted more than 6 million users in the UK and Europe, with more than 1 million customers paying for the service. Numbers of paying customers are understood to have soared recently as Spotify restricted the amount of free listening available to users.
The $1bn price tag comes just days after rival music streaming site Pandora rocketed to a $4.2bn valuation on its market debut on Wednesday. However, Pandora's Wall Street party was short-lived as its shares plunged to $12 ? half the opening day high of $26 and well below the $16 per share price it started its first day of trading.
Spotify's general manager, Jonathan Forster, did little to dampen down the anticipating surrounding the service's US expansion this week. He told an Omnicom conference in London on Tuesday that it would not make the move "before 5 July" ? the first time a Spotify executive has put a firm date on the plans.
Forster also confirmed that deals with the music majors were almost completed. "We're signing the remaining deals as I speak," he said.
Spotify's US challenge has been threatened by the three internet giants ? Apple, Google and Amazon ? which have launched competing cloud music services.
However, unlike Spotify, the US-based services do not allow users to play music that they do not already own.
Only Apple has been able to agree terms with the music majors for its iCloud service, unveiled last week, with Google and Amazon shunning the deals as unnecessary and unduly expensive. Google has not ruled out linking up with the music majors in the future.
It is thought that Spotify's freemium business model ? in which about 15% of its active users actually pay for the service ? has hindered negotiations with the labels.
The most recent audited annual accounts for Spotify, for 2009, show it lost �16.6m in the UK on revenues of �11.3m.
Spotify declined to comment.
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Source: http://www.guardian.co.uk/technology/2011/jun/17/spotify-funding-value
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