Spotify hires Goldman Sachs in hopes of raising $500m

Guy Bentley
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Spotify's hoping for a new cash injection (Source: Getty)

Spotify is hoping to raise more cash and has hired the world's most famous investment bank Goldman Sachs to do it.

The music streaming company has probably delayed its long-awaited public listing by pursuing this round of financing. Spotify has said it wants to raise $500m.

The financing would value Spotify near $6bn people familiar with the matter said. They added that Spotify was in discussion with investors who usually shell out cash to companies that are preparing for their initial public offerings.

Spotify achieved significant growth in revenue in 2014 however monthly revenue per user has declined for both subscription and advertising. Spotify has 60m active users, 15m of whom are paying subscribers.

At the tail end of 2013 Spotify raised $250m valuing the company at $4bn. But it continues to lose money posting net losses of $80m. The company had something with a bust up with artists Taylor Swift after she withdrew her albums from the service.

Her decision to leave the service coincided with the release of her new album “1989”, the fastest selling in the US since 2002. Spotify's brand took a hit after falling out, with polling company YouGov's BrandIndex data showing the company's buzz score (whether a respondent has heard anything positive or negative about a brand) falling from 5.6 to 3.2.

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