European music streaming service Spotify has closed a $100 million round of funding in anticipation of a launch in North America. The round comes from DST, Kleiner Perkins and Accel.
American consumers who pay attention to the tech and music industries may have a bit of Spotify whiplash. It is coming. It didn’t come. Why didn’t it come? It is going to be integrated into Facebook. With this funding round, reported by AllThingsD, is Spotify finally on the boat across the pond? As consumers, do you even care anymore?
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The funding values Spotify at $1 billion. Free U.S. music streaming service Pandora, which has been going through the IPO tumult this week, is valued at $2.07 billion as of 12:10 p.m. EST, June 17 (these things can change rapidly, that might not be the valuation in an hour). It has raised €83.2 million ($119 million or so by current conversion rates) before this most recent round of funding.
Spotify has signed music streaming agreements with three of the four major U.S. record labels and is reported to be in talks with the fourth, Warner Music Group. AllThingsD points out that Warner Music Group sold for $3.3 billion to Russian billionaire Len Blavatnik in early May.
Spotify’s Facebook integration is not expected to hop the pond when the music streaming service does. The business model is unlikely to change in the U.S., with free users allowed a certain amount of hourly usage per month and paid users allowed unlimited streaming.
Spotify is going to have to try and differentiate itself to get U.S. users to pony up $10 a month for the service. It is not like they are lacking for options. MOG, Rdio, iTunes (iCloud coming), Google Music Beta and Amazon all have strong offerings on the market.
Does Spotify still excite you? Will you become a subscriber when it finally hits the shores of the New World?
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