Spotify is seeking cash to help fuel its global growth. According to a report at Swedish news outlet Dagens Industri, the world's largest music subscription company is seeking debt financing at a $5.27 billion valuation.
The report claims Spotify's two founders, Daniel Ek and Martin Lorenzon, are inclined to borrow money because they do not want to dilute their ownership shares. A company spokesperson had no comment on the report.
The cash-intensive nature of the subscription music business would explain Spotify's desire to raise additional funds. Although the company has over six million subscribers and 24 million users, it isn't yet profitable (it lost over $77 million last year). In fact, profit is probably not a priority in the near term.
Instead, Spotify is a growth-minded company. It operates in 28 countries and is planning to add more. Job openings are currently posted online for positions in as-yet-untapped markets Brazil, South Korea and Turkey.
Launching in new countries, hiring a work force for local markets and constantly improving its product requires money. To date, Spotify has raised $288 million, according to Crunchbase.
A fundraising at $5.27 billion would be a big step up in valuation. Its last round of $100 million, in November, valued the company at $3 billion (reports said that round originally had the company valued at $4 billion).