Russian investment fund DST Global to invest over $100 million in the European Internet music portal Spotify

DST Global, a Russian investment fund is to invest over $100 million in the European Internet music portal Spotify, TechCrunch reported. According to the TechCrunch report, the Russian firm is keen on increasing its investments in Europe. Unlike previous DST deals, this will direct investment into the portal's development, TechCrunch.com said, quoting sources familiar with the matter.

Spotify raised 83.2 million euros, about $113 million in 2009-2010, including investment made in February 2010 by Founders, a fund owned by Facebook President Sean Parker. The planned investment to develop Spotify will increase the company's value to about $1 billion. Sportify's net losses in 2009 amounted to $26.7 million. Spotify has created a lightweight software application that allows instant listening to specific tracks or albums, with virtually no buffering delay.

DST Global has stakes in Facebook, Groupon, and Zynga, a developer of games for social networks. It is also a shareholder of Russia's largest social network Vkontakte, Odnoklassniki and MoiMir@Mail.ru social networks and ICQ messenger.

Spotify is a Swedish music streaming service offering unlimited streaming of selected music from a range of major and independent record labels including Sony, EMI, Warner Music Group and Universal. It is presently only available in certain parts of Europe, mostly Western European countries. The system is currently accessible using Microsoft Windows, Mac OS X, Linux, mobile devices and those running iOS, Android, Symbian, Windows Mobile or Palm's HP webOS.

Music can be browsed by artist, album, record label, genre or playlist as well as by direct searches. On desktop clients a link allows the listener to purchase selected material via partner retailers.  Launched in October 2008 by Swedish startup "Spotify AB", the service has approximately ten million users as of September 15, 2010; about 750,000 of these are paying members.

Spotify created a lightweight software application that allows instant listening to specific tracks or albums, with virtually no buffering delay. Users will simply download and then log onto their service enabling on demand streaming of music. Spotify has yet to launch in the U.S., although label deals are apparently, finally, coming together.

Unlike previous DST deals, this will not be a secondary-type financing where founders are taking money off the table, reported TechCrunch. The Swedish start up is currently mulling a US presence.

2 March 2011

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