Streaming music startup Spotify, is looking to finish off its latest round of financing at $100 million. The Wall Street Journal reported the figures claiming that the new amount will bring the total worth of the company to $3 billion. The latest injection of cash will be from different investors and the WSJ has listed Goldman Sachs as one of the financiers but has not named any other VC’s involved in the deal.
The company had only recently reached a $1 Billion valuation when it received $100 million in cash last year thanks to capital from Kleiner Perkins Caufield & Byers and DST Global from Russia. At the time, Spotify was aiming for a $4 billion valuation but it has now pulled back on that like many other startups that are cautious about being over valued.
Since its launch in 2008, the company has grown to claim 15 million active users and 4 million paying subscribers to its streaming music service. However, the big numbers have not translated into big profits and the company had a dismal 2011. Spotify revenue jumped 151 percent from 2010 with losses increased by 60 percent. Reports from PrivCo for Spotify indicate a net loss of $37.5 million on $97 million in revenue for 2010. The next year also saw losses as revenue increased to $244 million and losses increased to $59 million.
PrivCo, which specializes in data for non-publically traded companies, has stated that Spotify’s business model is “unsustainable” in the current format. They go on to say that “something must change soon on Spotify’s business model if the company is to survive.”
Source: CNET
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