The launch of Apple Music doesn't appear to have done any immediate damage to rival Spotify, as the Swedish streaming service's valuation has reportedly grown to $8.53 billion (£5.52 billion) after the completion of a $526 million fundraising round.
Apple on Monday unveiled Apple Music, a music streaming service and 24-hour online radio station, that was seen as a potential threat to existing platforms like Spotify and Jay-Z's artist-friendly Tidal.
The widely expected announcement didn't put off investors like Nordic telecommunications firm TeliaSonera from ploughing cash into the Stockholm-based company, which is looking to expand into new forms of content.
With its $115 million contribution, TeliaSonera strengthened an existing relationship with Spotify, taking a 1.4% stake in the firm and signing up to joint projects with it.
"Both companies are also committing resources, staff and other assets to ignite the joint innovation agenda within areas such as media distribution, customer insights, data analytics and advertising," TeliaSonera said in a statement.
Other investors to join the fundraising included British asset managers Baillie Gifford, Landsdowne Partners and Rinkelberg Capital, as well as Canadian hedge funds Senvest Capital and Discovery Capital Management, the Wall Street Journal said, citing a source.
Sportify adviser Goldman Sachs also chipped in through a fund, while Halcyon Asset Management, GSV Capital, D.E. Shaw & Co., Technology Crossover Ventures, Northzone and P. Schoenfeld Asset Management, were also involved, the WSJ added.
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Accountancy firm BDO have however cast doubt on the accuracy of the latest valuation, calling it "premature" given the valuations of tech giants like Apple and Google.
"The figure given implies a price [to] revenue multiple in excess of eight times, compared to around 5.5 for Google and just 3.5 for Apple," said BDO valuations partner Tomas Freyman.
Freyman also said that Apple's global footprint in the smartphone market means it can now offer real competition to Stockholm-based Spotify and noted that there are still questions on how Spotify can make the most of its subscribers.
"Whilst losses continue to mount, time will tell if Spotify is able to appropriately monetise it's user base and meet the cash flow expectations of investors and in-turn live up to its $8.53bn value," he said.
The news comes as reports emerged that Apple Music has already ruffled the feathers of regulators in the US.
The attorneys general of New York and Connecticut are reportedly looking into whether Apple pressured record labels, or colluded with them, to pull backing for services like Spotify.
