And that investment brings the Sweden-based online music streaming service (HQ in London) up to a net worth of $1 billion. The subscription-based service offering free and paid options (without ads) is aiming at a U.S. launch where it may become a threat to established personalized music webcasters like Pandora and Slacker. Pandora recently filed a $100 million IPO; Slacker recently raised $3 million.
TechCrunch reports Spotify will also get $50 million worth of additional financing from the Russian firm DST Global, founded by Yuri Milner and the same group of venture capitalists that has given significant backing to Facebook, Groupon and Zynga. The company initially bought a $200m stake in Facebook in 2009, and is believed to have subsequently increased its stake to almost 10%. DST was also an investor in a $180 million fundraising for Zynga, the maker of Facebook games such as Farmville.
The $100 million also includes Kleiner Perkins Caufield & Byers putting in a $50 million to get a nearly 5% stake in Spotify, says the UK Independent.
Spotify has already signed with Sony and EMI and is currently in negotiations with the other two major label conglomerates to begin streaming in the U.S. The move comes as Pandora is set to raise $100 million for its expansion.
Spotify was having trouble breaking into the U.S. Some had thought it was simply having tough negotiations with record companies that were causing the holdup, but some had said Apple may be blocking the Swedish company to protect both its iTunes Store sales and also a future streaming model, reports Wired and CNet.
Spotify offers unlimited streaming of selected music from a range of major and independent record labels including Sony, EMI, Warner Music Group and Universal. The company has recently been working to finalize music label deals in the US, in order to finally launch the service here in the US. It is presently only available in certain parts of Europe, mostly Western European countries. The system is currently accessible using Microsoft Windows, Mac OS X, Linux, mobile devices and those running iOS, Android, Symbian, Windows Mobile or Palm’s HP webOS.
RBR-TVBR observation: It would be tough to plant a foothold here in the US against Pandora. But like “Slacker Premium Radio,” which blends on-demand audio to its offering, Spotify does have an option not yet available on Pandora.
