(Yicai Global) Sept. 18 -- Global music-streaming service Spotify AB rejected advances from Chinese tech giant Tencent Holdings Ltd. [HKG:0700] earlier this year in a possible takeover bid, online tech blog TechCrunch reported on Sept. 16.
Spotify, which may go public in the US next year, reportedly held initial talks with Tencent as the latter looked to expand its fast-growing music service beyond markets in China and Asia.
Tencent and Spotify haven't commented on the reports.
Spotify has developed into an industry-leading music-streaming service worldwide, with more than 140 million active users and more than 60 million paid users. The company, founded 11 years ago, is now valued at USD13 billion (CNY85.1 billion). Its main competitor, Apple Inc. [NASDAQ:AAPL], unveiled its own music-streaming service several years later, and continues to lag behind in the market. Apple Music's paid users totaled 27 million as of the end of June this year.
Reasons for Tencent's possible interest in Spotify are evident. Following Tencent Music's spin-off from its parent last year, the company is now spending more time developing its own music services. The number of users on its key music platforms (QQ Music, KuGou Music, and KuWo Music) has reached 600 million.
Tencent Music aims to raise a certain amount of capital from strategic investors, insiders say. The firm's pre-IPO valuation is up to USD10 billion.
The Chinese firm is also exploring other global markets and business fields. For example, it operates Joox, a freemium music service that competes with Spotify and other services in Southeast Asia and is showing great momentum. It also invested significantly in karaoke app Smule earlier this year.
If Tencent did acquire Spotify, its presence would increase to over 60 countries.
Other well-known companies, such as Google parent Alphabet Inc. [NASDAQ:GOOGL] and social networking platform MySpace, have considered acquiring Spotify.