Spotify

Just in time with Apple Music’s huge launch, Sweden’s TeliaSonera has today announced that it is investing a further $115 Million into Spotify, following more than five years of successful partnership. This round, apart from making this an obviously interesting battle between two music streaming giants, will value Spotify to the north of $8.5 Billion.

While TeliaSonera is the only one making its investment public, a Wall Street Journal report, citing inside sources, says that the total investment in this round is to the tune of $536 Million, valuing Spotify at a staggering $8.53 Billion. If however, we take only TeliaSonera’s investment into account, the valuation stands roughly at $8.2 Billion.

As a part of this recent TeliaSonera investment deal, both companies are also committing resources, staff and other assets to “ignite the joint innovation agenda” within areas such as media distribution, customer insights, data analytics and advertising. A joint TeliaSonera-Spotify team will be set up to run the projects.

As software giants like Apple get into the domains of smaller, niche companies like Spotify, these companies have started looking for consolidation options. TeliaSonera President and CEO Johan Dennelind notes,

We’ve set-out to create a New Generation Telco where innovation is key to our success. Spotify is a great company, loved by customers and with a world class take on innovation I’m excited to join Spotify’s journey as investor and key partner

There’s one more thing in common though, between TeliaSonera and Spotify. Martin Lorentzon, Spotify Chairman of the Board, has been a member of TeliaSonera’s Board of Directors since 2013. However, TeliaSonera notes, that “Lorentzon has not participated in the board’s discussions or in the decision leading up to the partnership. TeliaSonera’s board and management have been in dialogue and discussed the transaction directly with Spotify’s executive management.”

This huge and aggressive investment into Spotify is a clear indication that we are about to witness an intense viewership battle between Spotify and Apple Music. While Spotify is currently one of the world’s biggest streaming music services, with 15 million paid users and 60 million users globally, Apple is already planning to rope in as many as 100 Million users initially, as it launches the entire Apple Music suite in 100 countries across the globe.

Other factors, like Apple Music coming on Android too and iTunes’ already large user-base, will also play a huge advantage for Apple Music. iTunes is already digging into Spotify’s user-base, which is pretty clear from Global Web Index’s today’s chart of the day : (chart via TechCrunch)

chart-of-the-day-screen-shot-2015-06-10-at-08-22-42


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