Spotify has raised $380 million (£230 million) in a new funding round, led by Goldman Sachs, with a new valuation of $8 billion (£5.3 billion). It is the eighth funding round for the company, hinting at a large acquisition or investment into new services.
The past funding round was for Series F, with $250 million (£165 million) raised by Technology Crossover Ventures, according to CrunchBase. The music streaming service has reportedly found profitability since 2013, meaning this new venture is to raise capital for something.
Spotify is now the largest music streaming service in terms of valuation, twice the size of rival service Pandora. It recently announced 60 million active monthly users, with 15 million of those paying per month for Spotify premium.
There were rumors late in 2014 that Spotify would look for an IPO in 2015, but that seems unlikely to happen. Spotify CEO Daniel Ek reportedly doesn’t like the current outlook of the stock market, which might harm Spotify in 2015 if competition starts to heat up.
Several events in 2014 would have been controversial on the stock market for Spotify, like Taylor Swift dropping out of the service or Jay-Z launching Tidal earlier this year. In some ways Spotify’s success hinges on artists working with them, meaning it could be a volatile stock to hang onto with Apple preparing its own music service.
Spotify has overcome tough obstacles before and this valuation should keep investors interested in the long term viability of the music streaming service.
Apple is preparing to launch its new music service in June at WWDC 2015, meaning Spotify have a month if they want to make a big announcement, before they are drowned out by Apple’s Beats Music.