Wheelings & Dealings: Spotify Brings in Over Half a Billion in New Investment to Take on Apple

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Spotify is a familiar name for many when it comes to streaming music, and with good reason. But it's also a name that has a lot of competitors associated with it, including Pandora, and more recently the Apple juggernaut. There are many who seem interested in Spotify succeeding in its battle, or at least remaining a viable alternative, a fact evidenced by a fundraising round that recently concluded, bringing with it $526 million.

The funding round called upon sources worldwide, particularly from the United States and Europe. The Nordic telecommunications firm TeliaSonera AB is responsible for about a fifth of the total, investing $115 million and noting that both it and Spotify were slated to work together on several fronts, including advertising, analytics services, and even media distribution. Spotify was said to be attracting funding on the strength of new growth; the company was putting big investment into new forms of content in a bid to fend off the rise of a major new threat: Apple Music.

Apple Music was unveiled on Monday during the Worldwide Developers Conference (WWDC) event, and showed itself a clear match for Spotify. A 24-hour global Internet radio station, Apple Music is putting in some specific features geared toward better presenting music to users. Human curation helps make searches relevant, and Apple Music Connect helps give the artists involved more control over the music played, as well as the ability to better connect with fans, moves seemingly designed to fend off other competitors like Tidal, and even Spotify.

Iamge via Shutterstock

The move has given Spotify a total value of $8.53 billion, more than double that of Pandora. Spotify is going to need this valuation as it seeks tofend off the growth of major names in the field.

Spotify already has quite a user base and a decent quantity of name recognition to its credit as well. But with some very serious competition in the field, and a steadily growing market pool—the rise of the connected car might even end up taking the local radio station with it in favor of the highly customizable streaming music experience—Spotify will need a fresh face to draw in more users and reinforce its base ahead of the arrival of Apple Music. Apple Music will likely have incredible name recognition with it and access to the company’s huge preexisting customer base.

Spotify will not only have to appeal to the users, but also to the artists, in order to keep its playlists fresh and ready to go, a development that will likely need plenty of ready cash to develop, something it now has. The battle for listeners will be a major one, and those not ready for the fight might find closure rather than expansion in the future.




Edited by Dominick Sorrentino
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Contributing TechZone360 Writer

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