SAN FRANCISCO Nov 21 Online music-streaming
service Spotify has raised $250 million in a new funding round,
making it one of the world's most richly capitalized start-ups.
The new funding round was led by Technology Crossover
Ventures, a Silicon Valley-based venture-capital firm, a person
familiar with the matter said on condition of anonymity because
the deal is private.
The cash can help the Swedish music service bolster its U.S.
business, which trails services such as Pandora, and
launch in other countries such as Japan. The newest financing
brings the value of Spotify to more than $4 billion, according
to the Wall Street Journal, which first reported the funding
round on Thursday.
Spotify raised $100 million last year from investors
including Goldman Sachs. In 2012, it raised $100 million from
investors including Kleiner Perkins and Digital Sky
Just a handful of start-ups, including daily deals site
Living Social, online bulletin board Pinterest and online survey
tool SurveyMonkey, have raised more than $400 million.
In July corporate filings in Luxembourg, where Spotify is
registered, showed the company more than doubled revenue in 2012
to 435 million euros ($571 million), while its net loss
increased to 58.7 million euros from 45.4 million a year
The business, launched in October 2008, strikes royalty
deals with record labels and pays about 70 percent of its
revenue back to rights holders. Spotify has about 24 million
active users, of whom 6 million pay for a premium service,
spokeswoman Alison Bonny said. It operates in 32 countries.
She declined to comment on the funding round.
Streaming and on-demand music have soared in popularity
alongside smartphone use, but companies like Spotify and Pandora
- which has almost 68 million active listeners - have struggled
to make profits due to the cost of royalty fees.
Earlier this year, Apple Inc introduced its iTunes
Radio product, which is similar to Pandora, Spotify and other