TeliaSonera Buys 1.4% of Spotify for $115 Million
Following more than five years of successful partnership, TeliaSonera and Spotify have decided to tighten their relations even further.
On Wednesday, Swedish telecommunications operator TeliaSonera announced that it would invest $115 million to acquire a 1.4% stake in Spotify, valuing the streaming music service at more than $8.0 billion. (Source: TeliaSonera, June 10, 2015.)
This investment could provide a big shot in the arm for TeliaSonera’s bottom line. Today, Spotify has more than 20 million paying subscribers, more than doubling the company’s customer base in under a year. On average, the service added one new subscriber every three seconds over the past 12 months. (Source: Spotify, June 10, 2015.)
According to TeliaSonera President and CEO Johan Dennelind, the company is determined to “[…] create a New Generation Telco where innovation is key to our success.” (Ibid.)
“Spotify is a great company, loved by customers and with a world class take on innovation. I’m excited to join Spotify’s journey as investor and key partner.” (Ibid.)
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Spotify is also excited about the cooperation in the future. CEO and Founder Daniel Ek said, “We have a long and great relationship with TeliaSonera and I’m pleased we’re able to take this to the next level together with this strategic partnership.” (Ibid.)
But while Spotify is revolutionizing the music industry, competitors plan to shut it down. At the company’s World Developer Conference earlier this week, computer giant Apple (NASDAQ/AAPL) announced its own streaming service, Apple Music. The service will cost $9.99 a month, or $14.99 a month for a family of up to six people.
Whether Spotify will continue to prosper in the face of a company that revolutionized digital music with its “iPod” and “iTunes” remains to be seen.
