Swedish music streaming service Spotify has pulled in another $250 million (€185 million) at a whopping $4+ billion valuation, The Wall Street Journal reports. The round was said to be completely led by Silicon Valley-based Crossover Ventures, which has purchased convertible bonds from TV and movie streaming service, Netflix, and owns a stake in major tech companies like Facebook and Zwillo.
Last March we wrote that Spotify was rumored to be seeking funding at a $3.5 billion valuation, and eventually raised more than $100 million in funding at a valuation somewhere above $3 billion.
The funding round is said to be used to fuel further geographic expansion. Currently Spotify has over 6 million paying subscribers in 32 countries, most of which are located in the West. Spotify seems to be eyeing emerging markets, with access in locations like Hong Kong, Malaysia, Argentina, and Taiwan. The company says their ratio of paying subscribers to free users is somewhere above 20%.
The Wall Street Journal article paints a strong comparison to Pandora, the publicly traded streaming radio service. Somewhat remarkably, Pandora is trading at a higher market cap (at $5.7 billion) than Spotify’s current valuation, despite their smaller geographic footprint, less features, and smaller userbase.
This is Spotify’s Series F funding round, bringing their total raise to $538 million. I hate to speculate, but it would be really great to see two IPOs coming out of Swedish tech companies this year if Spotify decides to look for an exit after King, the developer of Candy Crush Saga, files for IPO.