Spotify raises $115 million from TeliaSonera in share sale
By Sven Nordenstam
STOCKHOLM (Reuters) - Swedish telecom operator TeliaSonera is buying into music streamer Spotify for a slice of the fast growth and rapid innovation typical of online companies, investing as competition heats up in Spotify's industry.
TeliaSonera said on Wednesday it would pay $115 million for a batch of newly issued shares, valuing Spotify at $8.2 billion, as it expands its partnership with the Stockholm-based business that provides free on-demand music or an advertisement-free service for paying customers.
The deal for a 1.4 percent stake in Spotify comes just two days after Apple, the world's most valuable company, launched a music streaming service at a price similar to Spotify's, muscling into a market already teeming with competition.
The Wall Street Journal reported TeliaSonera's investment was part of a larger round of funding by unlisted Spotify which had closed on Tuesday, raising a total of $526 million. There was no immediate comment from Spotify.
Apart from purely financial considerations, TeliaSonera Chief Executive Johan Dennelind said his company could learn from one of the world's most innovative companies.
Dennelind said the investment was part of a strategy to solve what he called "the industry puzzle", seeking new ways to grow in the face of stalling growth for telecom operators in their core business.
Like many European rivals, the Swedish telecom incumbent has had a hard time increasing revenue in its home market in the face of fierce competition.
"We want to master the internet logic as well as we have mastered the telecom logic," Dennelind said, pointing to faster growth in online services than in traditional telecoms. Continued...