If accurate, management is valuing the company at about $3.5 billion, a huge jump from its valuation just last year of $1 billion. During the summer of last year, the company raised $100 million at that $1 billion valuation.
So far, investors have been reluctant to invest at the new valuation given that Spotify does not own any of its own content nor does it have exclusive rights to that music content. If the major labels were to pull their music from the service, Spotify would be worthless.
Spotify, which was wildly popular in Europe and expanded to the U.S. during the summer of 2011, allows users to choose music to listen to and stream, for free, for a limited amount of hours per month. Premium accounts, which range from $5-$10 per month, allow unlimited access to the music, including from mobile devices, and higher quality recordings.
The company is likely looking to piggyback on the $4 billion valuation of Hulu, the similar movie/TV show streaming service owned by Disney, ABC and Fox. Hulu, however, has exclusive rights to the new content they show.
Written by: Andre Yoskowitz @ 24 Mar 2012 12:54