Report: Spotify Seeking Additional Funding

Music streaming service Spotify is working with Goldman Sachs Group Inc. on a new round of private fundraising, potentially putting off an initial public stock offering for another year, according to The Wall Street Journal.

The amount to be raised and the valuation are yet to be settled. However, the company has expressed a desire to raise about $500 million in financing, and investors have heard talk of valuations north of $7 billion, the people said.

The company is talking with investors who typically buy into companies ahead of an IPO, including mutual-fund operator T. Rowe Price Group , they added. Spotify has expressed a willingness to provide investors with “ratchet” provisions that give them a guaranteed return in the event of an IPO, one person said.

Already among the most highly valued startups in the world, Spotify hasn’t yet settled on any timing for an IPO, but with this fundraising in hand it could choose to wait until next year to launch the deal, one of the people said.

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