Invest Europe – Harder, Better, Faster, Stronger: How European VC backed a tech titan

Have a read of Nenad Marovac recent guest blog for Invest Europe, reflecting on the Spotify IPO and how European VC backed a tech titan.

Excerpt below, with original article available at Invest Europe

Company executives didn’t ring the opening bell. On the trading floor, they shunned the usual interviews. But despite the lack of fanfare, this highly-anticipated flotation, which valued the company at an unprecedented $26 billion, was a milestone for European venture capital.

A 23-year old Daniel Ek established Spotify in 2006 with co-founder Martin Lorentzon, a fellow Swedish serial entrepreneur who had previously bought Ek’s adtech company, Advertigo. Spotify’s entry into the music industry came at a time when digital piracy was rife and traditional labels were struggling to maintain sales. By creating a platform for streaming, it was able to reach consumers and monetise music in a fresh way. But they didn’t do it alone. Over the company’s 12-year history, it has benefited from funding and expertise from European VCs – and Invest Europe members – including Swedish firms Northzone and Creandum, Wellington Partners in Germany and Switzerland’s Lakestar.

Northzone’s General Partner, Pär-Jörgen Pärson knew something special was going on at Spotify’s Stockholm office in 2007 because of the buzz their slick new app was creating. High-profile names following the company’s progress included Sean Parker, the Napster founder who went on to become Facebook’s first president. In a Fortune magazine interview shortly before the listing, Pärson explained why he was initially drawn to Spotify. “They had a level of ambition that I hadn’t seen before in Sweden and were very aware of what they were building,” he said. “They weren’t settling for the good enough; they were going for the best.” On Creandum’s website, General Partner Fredrik Cassel reflects on why he was attracted to Spotify around the same time: “The pitch already from the start was, ‘This needs to be better than piracy’, and of course anyone who tried it knew that it was. It was just better.”