Home Uncategorized Spotify Desperately Needs Another $400 Million… Music NewsDigital Music News

Spotify Desperately Needs Another $400 Million… Music NewsDigital Music News




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Riddle me this: how can one startup be so bad at making money,
yet so great at raising it?

According to details
just published by the Wall Street Journal
, Spotify’s
money-burning bonfire is about to devour another $400
, its seventh financing round.  Goldman
Sachs is bankrolling a large portion of the mega-round,
with an Abu Dhabi fund also a source of cash.

Spotify has previously raised $500 million, though that money
has largely been burned through.  At roughly $900
million in aggregate financing, Spotify now carries an
incomprehensible valuation of $8.2

That dangerously high valuation makes the company almost
impossible to sell, and according to Wall Street Journal,
there isn’t even a timetable for an upcoming Wall
Street IPO
.  “Nine-year-old Spotify, which
previously raised more than $500 million in equity funding,
hasn’t established any timeline for a possible IPO,” the
Journal reports.

“The money-losing company needs the cash to support its costly
business model of paying nearly 70% of its revenue to rights
holders as royalties.”




Meanwhile, Spotify is facing massive pressure from the ‘big
three’ major labels to close their ‘freemium tier’.  The
majors, which carry an ownership stake of roughly 15%, and
are rumored to have unsuccessfully shopped Spotify at a

price tag of $10 billion

So far, there have been no takers.


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