Hitting the high note - Spotify's valuation soars to $4bn

The music streaming service is now worth more than $4bn after raising a fresh $250m.

by Elizabeth Anderson
Last Updated: 28 Nov 2013

Radiohead’s Thom Yorke may have recently labelled Spotify 'the last desperate fart of a dying corpse', but Spotify isn’t showing signs of slowing just yet. The music streaming service has raised $250m to launch in Japan, valuing the company at more than $4bn.

The funding round was led by Silicon Valley venture capital firm Technology Crossover Ventures, an early investor in Netflix. According the Wall Street Journal, this values the company at more than $4bn (£2.5bn) – up from a $3bn valuation a year ago.

Launched in 2008 by Swedish start-up Spotify AB, Spotify now reaches people in 32 countries and has 24 million users and 6 million subscribers who pay for its premium service. The firm charges £10 per month for unlimited access to some 20 million songs which can be accessed on a mobile. A free version includes advertising and can only be used on PCs.

— Thom Yorke (@thomyorke) July 14, 2013

Radiohead's Thom Yorke is a strong critic of Spotify

Because of its popularity, Spotify has attracted criticism from music artists who complain about how much it pays them. Radiohead and Atoms for Peace frontman Thom Yorke is one notable critic. Earlier this year he pulled some albums from the service, tweeting: ‘Make no mistake new artists you discover on #Spotify will not get paid. Meanwhile shareholders will shortly being rolling in it. Simples.’

In a more recent interview with Mexican website Sopitas, Yorke labelled Spotify ‘the last desperate fart of a dying corpse’, accusing the company of taking money away from record labels by re-selling their old albums for free.

‘That’s why, to me, Spotify is such a massive battle,’ he said. ‘Because it’s about the future of all music, it’s about whether we believe there is a future in music.’

Spotify is the latest private technology company to notch up a multibillion-dollar valuation after Dropbox was recently valued at $8bn and Snapchat $3bn.

Spotify’s revenue more than doubled to €434m last year, according to July filings in Luxembourg, where the company is registered. However, investment and expansion meant losses widened to €58.7m from €45.4m in 2011.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Interview ghosting: Stop treating job seekers like bad dates

Don’t underestimate the business impact of a simple rejection letter.

5 avoidable corporate disasters

And the lessons to learn from them.

Dressing to impress: One for the dustbin of history?

Opinion: Businesswomen are embracing comfort without sacrificing impact. Returning to the office shouldn't change that....

How to motivate people from a distance

Recognising success in a remote or hybrid environment requires a little creativity, says Insight SVP...

What pushy fish can teach you about influence at work

Research into marine power struggles casts light on the role of influence and dominant bosses...

The traits that will see you through Act II of the COVID crisis ...

Executive briefing: Sally Bailey, NED and former CEO of White Stuff.