Spotify is seeking to raise US$500m in investment which could see the music-streaming service hit a US$6bn-US$7bn valuation.
The New York Times reports that the Sweden-based company has retained global banking firm Goldman Sachs to raise the cash in private investment.
According to one source within Spotify, its valuation would increase to at least US$6bn if the investment is obtained; possibly even US$7bn or more.
The move is expected to delay the possibility of an initial public stock offering in the foreseeable future. The company has yet to comment on the story.
According to figures released in November, Spotify has more than 50m active users of whom 12.5m are paying subscribers, each paying US$120 per year.
The statistics were revealed in response to pop star Taylor Swift’s decision to remove her entire discography from the service, claiming low payments to the artists. Company CEO Daniel Ek defended the service, claiming that some US$2bn has gone into the coffers of the music industry.
Ek said: “Spotify has paid more than US$2bn to labels, publishers and collecting societies for distribution to songwriters and recording artists. A billion dollars from the time we started Spotify in 2008 to last year and another billion dollars since then. And that’s two billion dollars’ worth of listening that would have happened with zero or little compensation to artists and songwriters through piracy or practically equivalent services if there was no Spotify – we’re working day and night to recover money for artists and the music business that piracy was stealing away.”