Spotify is rumored to be looking for more cash, which logically makes sense as it continually grows users, paying subscribers and its music library. The jaw dropper comes with the valuation it expects- $3.5 billion, according to Business Insider, based on multiple anonymous inside sources.
As early as 2011, Spotify raised $100 million at a $1 billion valuation. At 3 and half times that, the company’s eyes are as wide as a cool pair of sunglasses staring at a rock star sunrise, set on stun.
And as Business Insider noted, its sources “asked not to be named because they didn’t want Spotify to know they are giggling at it behind its back.”
Both TCV and Andreessen-Horowitz have passed on the deal, according to the report.
Granted, the company reached 3 million paying subscribers in January, including at least a million in the US alone, and has been very successful at signing up new users because of its social nature that encourages users to share what they’re listening to on Facebook and other social networks.
Yet it doesn’t have ownership to the music its streaming, which likely makes investors twitch like Pink Floyd strung out comatose in a hotel room. Without exclusive access to specific music libraries, it’s easy for a competitor to mimic Spotify’s platform and saturate its market. Attaining exclusive programming of all the music out there is no easy task.
As music becomes free or close to it, founding a $3.5 billion business on the shared music collection of the world will take some tricky maneuvering. To pull it off and write a return check back to investors, Spotify will have to be nothing short of rock star.