Sweden-based music streaming service Spotify is looking to raise a $500m venture capital round at a valuation of more than $6bn, the Wall Street Journal reported yesterday.
The figures are yet to be finalised, sources familiar with the matter told the WSJ, but the cash would be raised in lieu of an initial public offering.
Founded in 2006, Spotify has raised about $540m in funding from backers including beverage producer Coca Cola, investment firms Goldman Sachs, Fidelity Investments, Digital Sky Technologies and Wellington Partners, and venture firms Horizons Ventures, Kleiner Perkins Caufield Byers, Accel Partners, 137 Ventures, Creandum, Northzone and Lakestar.
In addition, unconfirmed reports have stated that record companies Universal Music Group, Sony Music Entertainment and Warner Music Group, which is owned by conglomerate Access Industries, collectively hold almost 15% of the company.
EMI is also a shareholder, though the record companies’ stake is likely to have been negotiated as part of a rights deal, as opposed to a direct investment.
Spotify has recruited Goldman Sachs for the forthcoming round, a series G, and is reportedly in talks with prospective investors including mutual fund T. Rowe Price. It has also offered to include a provision that would guarantee investors a return from any IPO, the sources said.
Reports in March 2014 stated that the company was gearing up for an IPO in the autumn, but a public offering appears to have been put on the backburner for the time being.