Songs on-demand site Spotify raised ~$50 million from the Li Ka Shing Foundation, Wellington Partners and other existing backers, the FT reports.
The funding values Spotify near $250 million. The startup employs 75 people in Luxemborg, London, and Stockholm.
Spotify users can play songs on-demand, without downloading them. The service is free and ad-supported.
There is also a £9.99 ad-free subscription option and Spotify gets a comission for sending listeners to stores where they pay to download tracks.
The FT says investors feel the service will grow exponentially when its allowed onto Apple iPhones.
We love Spotify as a product, but wonder if it can reach profitability in this ad climate, given the expensive licensing fees its forced to pay music rights holders.
One possible way to get around that problem? Spotify could sell a stake to one or more of the record labels. That trick has worked for Hulu so far.
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