Spotify is looking to reach $1bn of investment in the space of a year.

The private equity firm behind chains including Poundworld and Italian restaurant Prezzo is reportedly in talks to invest $500m in Spotify.

As Sky News reports, TPG Capital, which acquired the UK discount chain for $150m last year, is looking to invest the cash in the form of convertible loan notes that can be converted from debt to equity at a later date.

The rumour follows reports last month that Spotify CEO Daniel Ek was looking to raise another $500m in investment after raising $526m during a funding round last year.

The investment is essential to Spotify, which still operates at a loss and faces tough competition from rival streaming services including Apple Music, Tidal and Pandora, which last year purchased Rdio for $75m.

Spotify has also been hit with two class action lawsuits in recent months, with songwriters looking for $150m and $200m in damages for copyright infringement.

The news follows speculation last week that electronics giant Samsung is considering a buyout of troubled streaming service Tidal. [via Music Business Worldwide]