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Spotify Raises $350M At $8B Valuation As Music Streaming Rival Grooveshark Shuts Down

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It's a great day for Spotify, but not so much for Grooveshark. There is wildly contrasting news for two music streaming services as one announced an impressive new funding round and the other finally shut its doors.

Spotify has announced a new $350 million funding round which puts the company valuation at more than $8 billion dollars. On the flip side, former rival Grooveshark has closed its doors following defeat in a long legal battle with the record labels.

According to CNBC, Spotify is now valued at more than $8 billion after a new $350 million financing round. Goldman Sachs institutional clients are believed to have taken part in the funding.

The news will be a boost to the Swedish music streaming service as it braces itself for competition with Apple, which is expected to launch a competing service in June. Spotify is currently the dominant player in the market with 60 million customers worldwide, 15 million of whom pay for a subscription service. Presumably this new round of funding will help them compete with whatever Apple is planning and stop Spotify going the way of the beleaguered Grooveshark.

Long before Spotify, Grooveshark was streaming music to fans around the world, but the company said it was shutting its doors in a statement on its website. The company had been in a six-year-long legal battle with major record labels including Universal Music Group, Sony Music and Warner Music Group. Grooveshark has agreed to wipe its servers clean of any unlawful music files, and encouraged users to use subscription services like Spotify, Google Play, Deezer and Beats instead.

The U.S. company had operated for nearly 10 years but unlike Spotify and others it didn't agree any licensing deals with the record labels. Instead, Grooveshark built a catalogue of music from users' uploads, which was what attracted the wrath of the music industry. The company admitted in the closing statement posted April 30 that it was wrong to do this and apologised.

"We started out nearly 10 years ago with the goal of helping fans share and discover music. But despite best of intentions, we made very serious mistakes. We failed to secure licenses from rights holders for the vast amount of music on the service. That was wrong. We apologize. Without reservation," the statement read.

At its peak between 2009 and 2011, Grooveshark had more than 35 million users, but the company has been in decline ever since the legal troubles started. Both Google and Apple removed the Grooveshark app from their app stores, severely limiting the service. The company actually settled with EMI and Sony out of court in 2013 but in September 2014 the major labels won their case against Grooveshark, which ultimately led to the closure.

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