Spotify we7

Spotify's €200m valuation and music label schmoozing is music to We7

Next Story

Digeo updates the Moxi HD DVR and releases the Moxi Mate

So the rumors that Spotify is raising a new round of financing of around $50 million have been confirmed by TechCrunch. That gives it a valuation of $250 million. The money will come from Asian investor Li Ka-Shing and another venture firm, potentially Wellington. Our report from October that Spotify had raised €15.3 million from Northzone Ventures and Creandum at a €71.6 million pre-money valuation was close-sih. In fact it was €20 million, and – most interestingly – included investments from all the big music labels. That put the company at a €100 million valuation. Now, more rights holders are participating, pressured by lots of interest from other VCs. Spotify has 2 million UK users but in Sweden it’s rumoured to have at least 5 million 1 million, and a growing footprint in Germany.

Is it true that labels are making more money now from Spotify than iTunes in those markets? Well, they they clearly have a direct relationship with the company, but put it this way, my builder has heard of iTunes – but he hasn’t heard of Spotify.

Meanwhile We7, a UK-basd ad-supported music streaming service and integrated MP3 store which competes with Spotify only in the UKalready has already amassed 2.5m UK people and 1.5m via media partners which include the NME, The Guardian, The Sun and GQ. We7 competes with streaming music sites Last.fm, Spotify, lala, and Imeem and with music search sites such as Seeqpod, Songza, Skreemr, Deezer, and HypeMachine.

In January last year We7 took a $7m/€5m series A round from Eden Ventures, Spark Ventures and musician turned entrepreneur Peter Gabriel.

While Spotify pushes for a US launch and retains its Joost-style model (stream from a desktop application) the web based nature of we7 means that the music can be played anywhere and shared via social networking sites, Twitter and even email. Their in-house research says 94% of users will listen to ads if they get music for free, so they’ve pushed the advertising angle hard, doing things like turning the service green for the launch of the latest Green Day album. They’ve also gone for the biggest audience base that was attractive to advertisers.

In theory that means it can scale faster. But Flash does not play on the iPhone, and Spotify is pushing it’s mobile angle hard with an iPhone app waiting for approval in the app store.

  • http://anders.tyckr.com/ Anders Fredriksson

    Who says that Spotify isn’t social. You can easily share links over social media and start playing a song or album by a simple click. Right now I’m listening to http://open.spotify.com/track/2S4lAby9LtHrSS8l5kyHO9 :)

  • ollyb

    I’d be very surprised if We7’s users don’t jump ship to Spotify.

    Hard to put finger on exactly why Spotify outclasses it- but the experience just feels ‘right’ in a way that Rhapsody, Napster, We7, 7 Digital etc etc never did.

    Your builder hasn’t heard of them- but my Polish cleaner has, and my aged parents even use it now.

    There are people in record labels that haven’t heard of we7 on the other hand…

  • Mike

    I wonder what will happen to that valuation when Microsoft releases their streaming music service…

  • David

    Where do these user number come from they are pure fantasy – 5m users in Sweden which only has a population of 9 million!

    Alexa shows ranking as ranked 546th in the UK which probably explains why I find it hard to find anyone in my office of 80 tech type people that use Spotify.

    I like Spotify and the love its interface but there is no way that I would pay for the premium service .

  • Jack

    In total, Spotify has over 6 million users. 2 m in the UK, 1 m, in Sweden, 1m in Spain, and 2 m spread across Norway,Gremany, France, Estonia, Netherlands and proxy users from all over the world.

    The Alexa ranking is probably based on the website which doesn´t say much since it´s the application that draws six million users.

    I think the premium service will gain in popularity when the all mobile apps are released (not just thinking about the Iphone app here)

    Regarding social aspects of Spotify. Type in the word spotify in the twitter search engine you´ll get a pretty good a idea how social it is. Do the same with we7 and Deezer and compare the results.

  • http://www.philippmoehring.de Philipp

    It seems it’s not only potentially Wellington, as David pointed out in the comments on the earlier posts, it’s in fact Wellington – they have already put Spotify on their portfolio page.

  • David

    Jack – thanks for correcting the numbers. It would be nice to see TC update their post with correct numbers.

  • http://10things.me tenthings

    the great thing with spotify services is the barrier to entry is 0. that’s what makes it so viral; i believe it’s going to be a great success story

  • http://www.ukstevieb.com/2009/08/05/steviebs-shared-items-august-5-2009/ StevieB’s Shared Items – August 5, 2009 at Lost in Cyberspace

    […] Spotify’s €200m valuation and music label schmoozing is music to We7August 4, 2009 […]

  • http://www.newsjacker.co.uk/media/we7-partners-with-ents24-to-sell-gig-tickets/ we7 partners with Ents24 to sell gig tickets 

    […] In January last year, UK-based We7 took €5 million in funding from Eden Ventures, Spark Ventures and musician turned entrepreneur Peter Gabriel. According to hitwise, we7 has now overtaken Last.fm as the most popular music site in the UK by pageviews. But ad revenues are dwindling, which may be why we7 has also just partnered with the recently launched Comparedownload.com, suggesting that they’re going after paid downloads more aggressively than before. CrunchBase Information we7 Information provided by CrunchBase […]

  • http://www.codedstyle.com/li-ka-shing-invests-in-spotify-bringing-crucial-mobile-expertise/ Li Ka-Shing invests in Spotify, bringing crucial mobile expertise | My Blog

    […] far, Spotify has raised between £20m and £30m from investors and record labels. Exact terms of this fresh investment were undisclosed. But it’s clear what’s going on […]

  • http://uk.techcrunch.com/2009/08/21/li-ka-shing-invests-in-spotify-bringing-crucial-mobile-expertise/ Li Ka-Shing invests in Spotify, bringing crucial mobile expertise

    […] far, Spotify has raised between £20m and £30m from investors and record labels. Exact terms of this fresh investment were undisclosed. But it’s clear what’s going on […]

  • http://www.simplyzesty.com/brands/spotify-banned-european-countries/ Spotify Ban their service across Europe with email to users

    […] coming cool new services set to make it big and with their recent round of fund raising coming at a 200 million valuation you would think that they would have pockets deep enough to cover the short term loss and not […]

  • http://blog.inspired.no/the-entrepreneur-tax-that-kills-business-711 The Entrepreneur Tax that Kills Business | Inspired? No

    […] assume that the Swedish music-streaming success and great service Spotify was started in Norway. Techcrunch reports their value at $250m. Lets also assume that founder Daniel Ek owns 20% (actually I would think he has a larger share). […]

  • http://www.cloudave.com/link/the-entrepreneurial-tax-that-kills-business The Entrepreneur Tax that Kills Business | CloudAve

    […] assume that the Swedish music-streaming success and great service Spotify was started in Norway. Techcrunch reports their value at $250m. Lets also assume that founder Daniel Ek owns 20% (actually I would think he has a larger share). […]

  • http://www.easybranches.com/8032/ Sources: Spotify Takes Investment From Sean Parker At Founders Fund | Easybranches.com™

    […] amount to get Parker’s involvement in the company. The investment was likely done at the same €200 million valuation as the round Spotify raised in late […]

  • http://hookedontronics.net/featured/sources-spotify-takes-investment-from-sean-parker-at-founders-fund/ Sources: Spotify Takes Investment From Sean Parker At Founders Fund | Hooked On 'Tronics

    […] amount to get Parker’s involvement in the company. The investment was likely done at the same €200 million valuation as the round Spotify raised in late […]

  • http://digitaldigg.com/blog/?p=1537 Sources: Spotify Takes Investment From Sean Parker At Founders Fund | Digital Digg Blog

    […] amount to get Parker’s involvement in the company. The investment was likely done at the same €200 million valuation as the round Spotify raised in late […]

  • http://reinstein.tv/?p=3531 Sources: Spotify Takes Investment From Sean Parker At Founders Fund | The Civic Beacon- Musings on Politics, Finance, Media, Culture, Celebrity, Gossip, Michael Reinstein, AtCost.com

    […] amount to get Parker’s involvement in the company. The investment was likely done at the same €200 million valuation as the round Spotify raised in late […]

  • http://syamsurian.com/tech/sources-spotify-takes-investment-from-sean-parker-at-founders-fund.html Sources: Spotify Takes Investment From Sean Parker At Founders Fund | Syamsurian.com

    […] amount to get Parker’s involvement in the company. The investment was likely done at the same €200 million valuation as the round Spotify raised in late […]

  • http://friends.insanity-reviews.com/2010/02/sources-spotify-takes-investment-from-sean-parker-at-founders-fund/ Sources: Spotify Takes Investment From Sean Parker At Founders Fund « Insanity Reviews Friends

    […] amount to get Parker’s involvement in the company. The investment was likely done at the same €200 million valuation as the round Spotify raised in late […]

  • http://loungepk.com/8642/sources-spotify-takes-investment-from-sean-parker-at-founders-fund/ Sources: Spotify Takes Investment From Sean Parker At Founders Fund | Lounge PK

    […] amount to get Parker’s involvement in the company. The investment was likely done at the same €200 million valuation as the round Spotify raised in late […]

  • http://tech.shaileshpatel.net/2010/02/sources-spotify-takes-investment-from-sean-parker-at-founders-fund/ Sources: Spotify Takes Investment From Sean Parker At Founders Fund | Technology Blog By ShaileshPatel.Net

    […] amount to get Parker’s involvement in the company. The investment was likely done at the same €200 million valuation as the round Spotify raised in late […]

  • http://gadgetfee.com/?p=504 Sources: Spotify Takes Investment From Sean Parker At Founders Fund « Gadget Fee

    […] amount to get Parker’s involvement in the company. The investment was likely done at the same €200 million valuation as the round Spotify raised in late […]

  • http://eu.techcrunch.com/2010/08/25/from-humble-beginnings-we7s-catalog-now-boasts-6-5m-tracks/ From humble beginnings, We7′s catalog now boasts 6.5m tracks

    […] to ad-supported streaming via a web browser. And this was before Spotify had launched, let alone gathered mind-share. With that shift came the content deals that the service needed and here we are today, with that […]

blog comments powered by Disqus