DST Is Going To Pour $100 Million Into Spotify

Russian investment firm DST, famous for its big stakes in Facebook, Zynga and Groupon, is about to lead a financing round of $100 million or more into Spotify, the very popular European music streaming app, TechCrunch says.

This is smart. Spotify has a proven revenue model and it's only going to get better. What it needs to come into its own is scale, ie being in the US as well as Europe. But to do that they need to entice record labels with big upfront cash payments. We suggested an IPO, old-school style, as a way to raise the cash, but going with the deep-pocketed and audacious Russian fund is an option as well.

For DST the deal makes sense as well. They like to invest in companies that are already big and have a big business already, but can yet get much, much bigger. Spotify fits the bill perfectly. And the company is still led by its founder CEO.

Spotify's current investors include VC firm Founders Fund, which is also an investor in Facebook, and Facebook's founding president Sean Parker sits on Spotify's board, so it's not hard to imagine where the connection comes from.

Don't Miss: Sean Parker Has A Deadly Allergy To Nuts. His First Night In Davos, He Was Served... Nuts →

Join the conversation about this story »

DST Is Going To Pour $100 Million Into Spotify

Backlink: http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/a06xjnkawDI/dst-spotify-investment-2011-2

DST About To Lead Huge Spotify Funding

European streaming music startup Spotify is in the process of closing a very large financing, say multiple sources. DST, the venture firm that has backed Facebook, Groupon and Zynga, is said to be leading the deal, which values Spotify at around $1 billion. The size of the round will be $100 million or more, say our sources. The company has raised at least €82.3 million to date, including a relatively small round of financing a year ago from Founders Fund. This new round, though, is at a much higher valuation. The Founders Fund round was rumored to be at a similar valuation as the previous round, a 2009 financing that valued the company at around €200 million.

DST About To Lead Huge Spotify Funding

Backlink: http://feedproxy.google.com/~r/Techcrunch/~3/Jo2-8u728Bg/

Here's Why DST Won't Invest In Twitter

Twitter is doing really well. The company can't stop adding users, and its revenue generating products look very promising. It is currently rumored to be raising money at a $4 billion valuation.

And DST is, of course, the Russian investment fund that recently went public and bought big stakes in hot, fast-growing startups like Facebook, Zynga and Groupon.

Investing in Twitter, which is innovative, huge and fast-growing, seems like right up DST's alley. But the main investor in the running for Twitter seems to be Kleiner Perkins. And while DST partners sometimes act suspiciously coy about Twitter, we're not hearing that the Russian investment fund is seriously in the running.

Some people usually point to the fact that Twitter's revenue engine hasn't really grown to the same scale as these other companies', and that's probably a factor. But we think there's another, bigger factor at play here.

There's another thing that Facebook, Zynga and Groupon have that Twitter doesn't have: a Founder who has remained CEO throughout the life of the company.

Even though they wouldn't say so, to keep their options open and to avoid looking like they're criticizing other companies, we think that's part of DST's investment criteria. It's not just that the most successful tech companies (Apple, Microsoft, Amazon...) often follow this pattern. It's that one of the things that sets apart what's now called a "DST deal" from other late-stage funding rounds is that they don't ask for any form of control over the company -- not even a board seat.

If you're going to invest massive amounts of money in a startup that's huge but still risky, and have zero control over your investment, then you want to really, really trust that company's CEO. And the CEOs who have the best, strongest incentives to make a business thrive and go for a huge win (as opposed to, say, a $6 billion offer from Google) are Founder CEOs, because they have an emotional attachment to the business. Especially after that Founder CEO has taken money off the table so they can focus on the grand vision of the company, which is another feature of a "DST deal". 

We think Twitter is an amazing product and company and will build a successful business that has good chances of going public one day. But if we had to guess, we'd say DST probably won't do its signature type of deal with Twitter because of its rotating CEOs.

Join the conversation about this story »

See Also:

• DST Invested Over $500 Million In Facebook
• How A Russian Billionaire Is Changing The Way Startups Grow Up
• WordPress Is A Lousy Business -- And Everything Else You Missed At LeWeb

Here's Why DST Won't Invest In Twitter

Backlink: http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/zLlY2lBuCyM/heres-why-dst-wont-invest-in-twitter-2010-12

Facebook, Groupon And Zynga Investor Mail.ru (aka, DST) Shoots For $5.7B Valuation In IPO

Mail.ru Group, formerly known as Digital Sky Technologies and notable investor in Internet sensations Facebook, Groupon and Zynga, among others, has filed for a $876 million IPO on the London Stock Exchange that would value the investment firm at up to $5.7 billion. That valuation is higher than expected (earlier reports predicted a $5 billion valuation).

Post originale: http://feedproxy.google.com/~r/Techcrunch/~3/0KGPAiaEevY/