Spotify raised funding of approximately US$350 million, bringing the company’s valuation to US$8bn.
That’s according to CNBC sources, who claim a large chunk of the funding came from Goldman Sachs. In January it was reported that Spotify had retained the global banking firm with the intention of raising US$500m in private investment.
If accurate, it would mean that Spotify now boasts twice the public market capitalisation of one of its closest music streaming rivals, Pandora. The company has declined to comment on the reports.
Spotify offers both a free and premium service to its customers, though it has recently been suggested that record labels may be unhappy with its freemium model. But the Swedan-based firm has rubbished suggestions that it should curb its free service, asserting that the offering is vital in getting users to stay away from pirated music.
“Any content you restrict on your free service is going to be all over those places where no one pays for content – like piracy,” said Jonathan Prince, Spotify’s global head of communications and public policy in March.
“We believe that our free tier is a critical element to driving subscriber growth, and, frankly, we’re so committed to the freemium model because we agree so much with the labels that subscribers are key to bringing the industry back to health – and we need the free ‘funnel’ to drive subscription.”
Spotify image via Shutterstock