Fundraising to lift Spotify to $1bn valuation, reports the FT, Digital Sky Technologies being the rumoured new investor.
More than 10m people across European countries use its advertising-supported service to listen to a catalogue of 10m tracks for free, on-demand over the internet. But it has attracted fewer than 1m paying subscribers to its mobile and ad-free premium service, a conversion rate that concerns some record labels investors in the company.
Concern over its business model and the probable returns for artists and labels has held up a planned launch in the US for more than a year, although it is now starting to secure contracts with US labels.
The [company's 2009] accounts showed Spotify lost £16.6m in the UK in 2009, on revenues of £11.3m.
“$1bn is pretty frothy for a loss-making business, whilst growing fast,” said one venture-capital investor in a rival music service.