14 DAY TRIAL // Reports that Spotify secured a new round a funding, with the music streaming service getting as much as $50 million at a valuation of $250 million from several investors, surfaced earlier this month. It is now clear that Hong Kong telecommunications mogul Li Ka-shing was one of the investors, though further details like the size of his share or the price paid for it weren't disclosed.
The Li Ka-shing Foundation confirmed to Forbes that it had indeed secured a minority stake in the music startup. Li Ka-shing also got a seat on Spotify's board of directors as part of the investment and the position will be filled by Frank Meehan, CEO of INQ, a mobile phone manufacturer owned by the former. Ka-shing apparently doesn't plan to get too involved in the operations for the moment, leaving the company grow naturally, and isn't too concerned about the current lack of revenue at the startup.
Li Ka-shing is a Hong Kong billionaire, owner of Hutchison Whampoa, a Fortune 500 company, and a number of other businesses. Through Hutchison Whampoa he also owns the “3” mobile phone carrier that operates in several countries in Europe and Asia. He also owns INQ, a low-cost mobile phone manufacturer that makes social networking-enabled handsets.
With the Spotify investment he aims to leverage the telecommunications assets to begin pushing the streaming service into the mobile sector. With a distribution platform, the content provider and the mobile devices to handle the end-user interactions he could offer a complete platform for mobile music listening.
Spotify has been particularly successful in Europe, with 2 million subscribers in the UK alone, offering music streaming services and even offline listening. Part of its success seems to be the backing of all of the four big music labels, which got a very good deal early on. With the new investment the company plans to launch its service in the US as well.