The company's valuation, not including the money represented by the new fundraising, is $8 billion—twice the public market capitalization of its streaming rival, Pandora.
Spotify currently has 60 million monthly users, 15 million of which are paying subscribers, according to the company's website. Record labels—some of which are existing Spotify investors—recently have pressured the company to focus more on attracting more users to the paid tier to grow revenues.
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Through a spokesperson, Spotify declined to comment.
Spotify faces increased competition in the streaming space. Rapper Jay Z recently launched Tidal, a streaming service in which musicians hold majority ownership. Apple is widely expected to join the market after its acquisition of Beats Music last year.
The Wall Street Journal first reported last month that Spotify was nearing a $400 million round of funding that would value the company at $8.4 billion.
—CNBC's Jacob Pramuk contributed.
Correction: The $400 million round of funding Spotify was reportedly close to receiving was misstated in an earlier version of this story.