Spotify raises $1bn in fight against Apple Music
Spotify’s war chest grows.
Spotify has raised $1bn in investment to aid in its ongoing fight for music streaming dominance, The Wall Street Journal reports.
It’s not clear what the money will be used for, but TechCrunch believes it will be used for “growth and marketing,” in its fight against Apple Music while Recode speculates that it could be used to buy a rival service like SoundCloud or content for its new video streaming platform.
Spotify has raised the huge sum in convertible debt financing, which gives its investors the option to invest in the company at a discount of 20% should the streaming service go public in the next year.
According to TechCrunch, the company, which was valued at $8.5bn in June 2015, still had €570 million in the bank prior to gaining this new investment.
News of Spotify’s $1bn investment comes shortly after the launch of SoundCloud’s own subscription service, which the company is banking on helping it reach profitability.