Coca-Cola Is Said to Weigh Investment in Spotify Service
Coca-Cola Co. (KO) is in discussions to invest about $10 million in Spotify Ltd., the subscription music-streaming service, according to two people with knowledge of the discussions.
An agreement isn’t assured, said one of the people, who sought anonymity because the talks are private. An agreement may be reached in the next few weeks, Sky News reported yesterday, citing people close to the beverage company.
Coca-Cola, owner of the world’s most-valuable brand, has increased its ties to entertainment so it can market products to young consumers in a subtle way. The Atlanta-based company reached a deal in April to add Spotify to its Internet marketing, after a successful collaboration with record labels to produce the 2010 World Cup anthem “Wavin’ Flag.”
The song by singer-songwriter K’naan was a No. 1 iTunes download in at least 17 counties.
Coca-Cola fell 1.2 percent to $38.09 yesterday in New York. The shares have gained 8.9 percent this year.
Closely held Spotify is seeking to raise $100 million to $200 million from investors in a funding round that would value the company as high as $4 billion, people with knowledge of the situation said in May. The company was recruiting investors including Goldman Sachs Group Inc. (GS), the people said then.
The service, based in London, has been expanding to new territories and seeking to add artists as it faces competition from rivals including Rdio Inc. It raised $100 million last year from investors including DST Global, Accel Partners and Kleiner Perkins Caufield & Byers.