Spotify raised about €69 ($98.15/£59.97) million at a valuation of €774 ($1101.02/£672.68) million this summer for its roll-out in to the U.S., documents it filed this summer show.
The funding was raised in two closings – one in which existing investors put in €55 ($78.24/£47.8) million and another in which new investors provided €14 ($19.92/£12.17) million.
But, although existing investors had a preferential right to invest in the new round, €22.5 ($32.01/£19.55) million of their investment actually came as a “contribution in kind” rather than as cash.
Is it possible that record labels agreed to waive royalty advances up to a certain value to retain the proportion of the equity they were previously reported as owning?
The rest of Spotify’s shares to existing and new investors were valued at €276 ($392.61/£239.87) per share.
The valuation had first been mooted when Spotify was in the raising process this spring.
Last month, the company’s arm in Luxembourg, where it is registered, reported a €26.5 ($37.7/£23.03) million 2010 annual loss to authorities. It listed its assets as worth €50.9 ($72.41/£44.24) million.
According to an August filing, Spotify’s directors board comprises Napster co-founder Sean Parker, Spotify co-founders Daniel Ek and Martin Lorentzon, and Wellington partner Frank Böhnke plus Northzone partner Pär-Jörgen Pärson, who previously invested. Its management board comprises INQ Mobile CEO Frank Meehan plus Creandum partner Fredrik Cassel (ING owner Hutchison Whampoa’s chair Li Ka-Shing is a previous investor)
DST members were not listed on Spotify’s board.