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Spotify raises $250 million, reports WSJ, valuing the company at $4 billion

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Daniel Ek Spotify CEO stock photo
Daniel Ek Spotify CEO stock photo

Streaming music service Spotify has just closed $250 million in funding, reports The Wall Street Journal. The massive late-stage round was led by Technology Crossover Ventures, and values the Swedish company at over $4 billion. Spotify's betting on continued growth globally to finally help it achieve profitability, and with its new money, could potentially expand to more countries and roll out new features to compete with an encroaching Google Play Music behemoth. It may also be banking on the fact that, as with Twitter, an IPO could occur without profit, based just on the strength of its revenue growth. "If we think that the goal is better aligned by going public, sure we'll contemplate it," said CEO Daniel Ek in August of this year, reports the Journal, "But it's not something I spend any waking time thinking about."

The news comes as San Francisco-based streaming music service Rdio cut "up to one third of its staff" earlier this week. Pandora, the largest player in the streaming music market, went public in 2011, and is currently valued at more than $5 billion dollars. But, it has struggled to turn a profit and recently went through an executive shakeup. Spotify was said to be raising at a $4 billion valuation more than a year ago, however, which implies that Spotify's valuation has largely stalled out — a signal that investors are concerned about its potential. The company's losses are perhaps still growing, even as user numbers and revenue increase.