In 2012, Spotify had just completed its Pre-Series E funding round, with a post-money valuation of 1.5 billion US dollars.
After eight months of rapid expansion, a re-evaluation based on its current market share and number of paying subscribers placed its valuation at around 2.5 to 3 billion US dollars.
Compared to its 26 billion US dollar IPO valuation six years later, there was room for eight to nine times growth. Compared to its peak market cap of 149 billion US dollars, there was an opportunity for over sixty times the profit.
For Chen Yansen, investing in Spotify could, one, yield generous investment returns, and two, complement the application ecosystem for the Alexa Smart Speaker.
Besides, Daniel Ek's fees weren't high. If it were Apple's iTunes, Cook might have charged him a 30% music royalty fee.
Therefore, Spotify was clearly a worthy investment at this time!
