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Summary:

Spotify’s recent PR tightrope walk has paid off. We understand the streaming music app has now closed the funding round it was looking for.…

Daniel Ek and Martin Lorentzon, Spotify

Spotify‘s recent PR tightrope walk has paid off. We understand the streaming music app has now closed the funding round it was looking for. The startup is thought to have landed at least the £20 million or so it was seeking, making for what’s described as a “significant valuation”. The FT reports that the company is close to raising an investment that will be close to £30 million pounds (about $50 million) and values the company at £148 million ($250 million).

Investors may include the Li Ka Shing Foundation, which is controlled by Hong Kong investor Li Ka Shing, who has invested $120 million in Facebook and has also invested in Joost. VC Firm Wellington Partners is also participating, according to the FT‘s report.

A source tells us a total of three new investors have come aboard, including one which may be a record label. If a label is investing, it’s thought its contribution may be licenses for Spotify to stream its music in the US, rather than a financial contribution, or a mixture of both. That would give Spotify, currently available only in Europe and Scandinavia, a platform on which to build its ambitions of an American launch in Q3 or Q4. No comment yet from the company. We first revealed Spotify was seeking VC money in June.

The funding may be seen as a vote of confidence the ad-supported model. But, with free music services around it augmenting their ad-supported tunes with premium subs, Spotify has not yet proved the model – until recently, it was still experimenting with the ad models it offered buyers but, in fairness, we don’t, of course, have access to its ad sales figures and the company won’t reveal how many paying subscribers it has, though (as per the freemium model) it is a minority.

The founders, former Stardoll CTO Daniel Ek and TradeDoubler co-founder Daniel Martin Lorentzon, previously put

  1. Martin, not Daniel Wednesday, August 5, 2009

    The correct name is Martin Lorentzon. not Daniel.

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  2. Robert Andrews Wednesday, August 5, 2009

    Well spotified.
    Thanks.

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