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Spotify streaming service on song as it doubles worth

By Hazel Sheffield

Spotify's value has nearly doubled in six months. The streaming service is nearing a deal to raise $400m (£273m) from another round of funding, taking its value to $8.4bn ($5.74bn), according to reports.

Spotify was valued at more than $5bn (£3.4bn) last September, according to filings by the company that owns the shares. Forecasts show that this is up to six and a half times its revenue, which analysts said was around $1.3bn (£900m) in 2014.

If the deal with investors including Goldman Sachs and Abu Dhabi's sovereign wealth fund goes through, Spotify will become one of the highest valued private technology companies in the world, despite the fact that it is still struggling to make money.

Spotify pays 70% of its revenue to rights holders as royalties and not all users pay to stream. Only 15m users pay the premium to get unlimited ad-free streaming, compared to 45m that use the service for free but get hit with adverts.

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