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Music biz snapped up Spotify shares

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Music biz snapped up Spotify shares
13:48 CEST+02:00
Several major record companies own almost one fifth of the shares in the rapidly expanding Swedish online music streaming service Spotify, new documents reveal.

The shares were purchased at a low price prior to the company's public launch, a revelation that helps to explain some of Spotify's success in quickly building up a large music catalogue.

This information was revealed in a document Spotify submitted to the companies registration office in Luxembourg, according to Computer Sweden magazine.

All together, the record companies purchased 18 percent of Spotify shares in October 2008 for the equivalent of 100,000 kronor ($14,000). According to Computer Sweden, Sony BMG now owns 5.8 percent, Universal Music 4.8 percent, Warner Music 3.8 percent and EMI 1.9 percent of shares in Spotify.

Founders Martin Lorentzon and Daniel Ek are the largest shareholders in the company, which is currently valued at around 1.8 billion kronor ($250.7 million).

Two Stockholm-based venture capital firms – Northzone Ventures and Creandum – reportedly invested around 130 million kronor in the company last year.

Spotify is planning an autumn launch in the US, and according to reports from the Financial Times, the company's new investors are the Hong Kong-based Li Ka Shing and British venture capitalist firm Wellington Partners. According to Computer Sweden, Wellington was reported to have purchased 66.7 million kronor in shares in July.

Spotify is a relatively recent addition to the market for legal digital music services. By not having users save digital music tracks on their computers, the streaming service avoids many of the copyright issues associated with downloading digital music files.

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