Spotify raises half a billion dollars to go to war with Apple

Daniel Ek Spotify IllustrationMike Nudelman/Business InsiderSpotify CEO Daniel Ek.

Spotify is now worth more than $US8.5 billion following a massive $US526 million funding round, The Wall Street Journal reports.

The funding round comes as Spotify gears up to face a considerable new threat — the launch of Apple’s new music streaming service, Apple Music.

Launched in Sweden in 2008, Spotify is considered the industry leader, with a valuation (following this most recent round) twice that of internet radio competitor Pandora. It boasts 60 million users, of which 15 million are paid subscribers (the rest use a free, ad-supported model). But Apple is throwing its vast weight behind its new service, announced at its WWDC developer conference on Monday, and reportedly hopes to net 100 million paid users.

Spotify’s new funding round will help bolster the music service’s defences against Apple’s coming onslaught. There were reports that the company was raising funds, likely at a valuation of more than $US8 billion — but the final total is higher than previously anticipated.

Spotify now 23 investors, including Coca-Cola, Goldman Sachs Group, and Kleiner Perkins Caulfield and Byers.

Here’s the full list, via a report in

  • Abu Dhabi Investment Council
  • Accel Partners
  • Baillie Gifford
  • Coca-Cola
  • Creandum
  • D.E Shaw
  • Digital Sky Technologies
  • Discovery Capital Management
  • Fidelity Investments
  • Founders Fund
  • Goldman Sachs Group
  • GSV Capital
  • Halcyon Asset Management
  • Kleiner Perkins Caulfield and Byers
  • Landsdowne Partners
  • Li Ka Shing Foundation
  • Northzone Ventures
  • Rinkelberg Capital
  • Senvest Capital
  • Technology Crossover Ventures
  • P.Schoenfeld Asset Management
  • TeliaSonera
  • Wellington Partners

Here’s how Ek initially responded to the launch of Apple Music is a now-deleted tweet:

This is a developing story, check back for updates.

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