Report: Spotify Has Closed A Massive Fifth Round Of Funding That Values It At $3 Billion

Following our scoop that Spotify made $200 million in revenue in the first six months of 2012, AllThingsD is reporting the streaming music service has closed a big funding round at a $3 billion valuation. This would be Spotify’s fifth big round, and could add more than $100 million to the $188 million its raised so far.

We heard that the round hasn’t fully closed yet — but that info was a few hours old, and our source says that it is expected to close today or tomorrow.

The Wall Street Journal first reported that Spotify was seeking a $100 million+ round at a $3 billion valuation, and Goldman Sachs might be involved. As Goldman Sachs can play an underwriting role, its involvement could signal that Spotify is eyeing an IPO down the line.

Update: The New York Times now says that Goldman Sachs will contribute about half of the cash. Meanwhile, Coca-Cola is the source of 10% of the funding, and Fidelity Investments is putting in 15%. Fidelity is another potential underwriter that could help prep Spotify for an IPO.

The money could help it pay for big taxes from the record labels, marketing to attract new listeners and paying subscribers, and developers to finish building the browser-based version we wrote about this summer. Because a big chunk of the money Spotify raises goes straight to the labels, they have to raise more than they necessarily need for development and marketing. And since it raised $100 million las time, it would probably want to raise at least a bit more than that so it doesn’t look like a down-round and a loss of momentum.

The $500 million annual revenue run rate its supposed to hit in January still leaves it losing $40 million a year. But as it gets to scale it could finally become profitable. It just needs to fuel to get there, and this funding round could give it that injection.