Spotify raises $350M new funding round valuing streaming company at $8BN

CNBC reported that the company has successfully managed to raise approximately $350 million in a round led by Goldman Sachs as well as Abu Dhabi’s investment fund.

The Swedish-based music service has now been valued at over $8 billion, with approximately 60 million users out of whom 15 million are paying subscribers. But the company is now facing increased calls to grow its top-line with higher payment subscriptions to help increase revenues.

This year’s funding efforts have garnered almost double of what Spotify managed to raise at the end of 2013. With pressure from major labels and some Spotify investors, who are pushing the service to introduce subscriptions to users, Spotify is facing a hard time deciding its way about the situation.

In terms of music streaming competition, the company has been joined in the market by Jay-Z’s recent launch, the “Tidal” app which also allows music surfing. Similarly, Apple Inc. (NASDAQ:AAPL) also seems to be readying its entry into the premium music subscription market with its “Beats Music,” launched previously, and an expected surprise announcement due in June at the company’s Worldwide Developers Conference.

The fundraising comes as Spotify gains traction in the online music space, challenging established streaming rival Grooveshark for a larger share of the market. Grooveshark has now closed down its services, accepting defeat after a six-year-long case against record labels like Universal Music Group, Warner Music Group, etc. Google Play and Apple have also erased the Grooveshark app from their app stores. Spotify has gained ample publicity thanks to the site shutting down.

Spotify’s competitors include services such as Pandora, Google Play, and Apple’s Beats. But as Grooveshark shut down its services, it announced on its website that it encourages music lovers to switch to the next best thing around the world: Spotify.