On 17 February, 2010, Swedish online music service Spotify received a €11.6 million investment from Sean Parker, co-founder of Napster and first presidentof Facebook, according to documents retrieved by Computer Sweden from the Trade Register of Luxembourg, where Spotify's parent company is registered. The investment has given Parker a 5 percent stake in the company and a place on its board of directors.
This latest investment puts the valuation of Spotify as a whole at €230 million (US$300 million), up from a previous valuation of €190 million just a year ago.
Parker is the latest in a string of investors flocking to inject money into the Sweden-based company. Spotify raised more than €50 million in share premiums last year, according to the company's recently filed annual report for 2009, also retrieved from the Trade Register of Luxembourg.
The primary investors have been Nordic venture capital firms Northzone Ventures and Creandum, Germany-based VC firms Wellington Partners and Hommels Holding, and Chinese businessman Li Ka-shing, owner of Hutchison Wampoa and part of mobile operator 3. Last fall it was also revealed that Spotify had sold an 18 percent share in the company to record labels Sony BMG Music, Universal Music, Warner Music, EMI and Merlin for an insignificant amount of money.
Swedish founders Martin Lorentzon and Daniel Ek still control the majority of the shares in the company.
According to the annual report, the parent company's total assets as of 31 December, 2009, were €83.9 million, the bulk of which lies in its subsidiaries in Sweden and the UK. The Swedish subsidiary Spotify AB has a net book value of €40 million, and the net book value of Spotify Ltd in the UK is €11.4 million.
Spotify's parent company in Luxembourg reported a €0.6 million loss for the financial year 2009, while the Swedish subsidiary reported a small profit of €1.5 million.
Widely popular in Europe, the music service has been struggling to enter the crucial US market, thus far failing to reach the necessary deals with US record labels. Earlier this week US entertainment magazine Billboard reported that Sean Parker was set to head Spotify's US operations and to reboot stalled negotiations with the record labels. However, Spotify representatives have since described these claims as inaccurate.
Spotify is now looking at a much-delayed US launch later this fall.