Inside Spotify: From 2006 to Now Into a $2.1 billion business
Founders: Daniel Ek, Martin Lorentzon
Founded Year: 2006
Investors: Accel, Goldman Sachs, TPG Capital
Funding Raised: $2.1 billion
What Is the business model of Spotify?
Audio streaming service with a freemium model: free ad-supported music streaming and paid premium subscriptions for ad-free, on-demand listening
How Spotify got started?
Founded in Sweden to offer a legal alternative to music piracy—Ek and Lorentzon spent two years securing licensing deals with record labels before launching the platform in 2008
what growth strategy has Spotify followed?
Relied on a massive free user base converting to paid plans, integration with social media for viral growth, and continual expansion into new markets and content to become the global market leader
what are the top products/features of Spotify
Spotify music streaming app, Spotify Premium subscription, Spotify for Artists analytics dashboard, podcast streaming offerings
what was the biggest challenge faced by Spotify?
Struggled to achieve profitability due to hefty royalty costs paid to music rights holders, and faced competition from tech giants entering music streaming