We all love Spotify here at ArcticStartup and use it everyday to listen our favorite tracks. We also know that it was not cheap to begin with for the VCs to invest in Spotify even though it was (and still is) the early days, since the founders Daniel Ek and Martin Lorentzon had plenty of experience, capital of their own and know what they were doing. But if you thought it was expensive before, the Times Online reports that “Spotify is trying to drum up a valuation of close to £200m (roughly €230m) as it seeks new investment of between £20m (€23m) and £30m (€35m).”
Times Online further reports that If it Spotify achieves the valuation it aims for, the company will have almost trebled in value since it sold a £13m stake last autumn to Nordic investors Northzone Ventures and Creandum.
We are excited and for once, think the high valuation is for a very good reason. Just recently in an investor forum I heard a VC who had invested in Spotify proudly stating that Spotify is the next Skype, meaning that it will be the next big Internet service success story coming from the region. They certainly have the right direction and I don’t think I have seen any company have the same potential since. Regardless of whether Spotify ever reaches a $2.6 billion exit (with current exchange rate some €1.87 billion), or exit at all for that matter, I, for one, would invest in a heart beat.
Times Online also reports that Spotify has signed up more than 2m users in Britain since launching last October and that it took almost two years to persuade the four main record labels to let people listen free to their tracks. No small feat in any measure. A rather hilarious move to implicitly draw attention and emphasize the point that their business model works (advertising funded with an option to pay for ad free listening), the company has chosen Chris Anderson’s Free as the first audiobook on Spotify, although currently available only to UK listeners.
Spotify is also well represented on the Europas’ shortlist, TechCrunch Europe Awards 2009 for European and EMEA tech companies, that will be held on July 9 in London.
Disclosure: I am on the The Europas Awards Advisory Board