Spotify is in talks to raise a $400m round of funding that will value the music streaming service at $8bn, sources familiar with the matter have told Bloomberg Business.

This valuation is double what the company was worth when it raised $250m back in November 2013.

Spotify reported in January that it has 60m active users, of which, 15m pay the $9.99 subscription for ad-free music streaming.

The London-headquartered company is 10 years old next year and has largely managed to navigate the notoriously difficult music industry, where record labels take around 70% of revenue generated by streaming services for access to their artists.

But musicians continue to say that they are not adequately compensated for use of their work, with Taylor Swift pulling her albums from Spotify in November last year.

Rapper Jay Z took matters into his own hands earlier this month with the star-studded launch of rival streaming service Tidal. But Ed Rex, founder and CEO of London music startup Juke Deck, said in a piece for Tech City Voices that Jay Z and co are fighting the wrong enemy.

Brittney Bean, CEO of one of Tech City’s newest music tech startups Songdrop, said of the news: “Spotify’s continuously ballooning valuation is further proof that the market for streaming is undeniably a growth sector in digital media, and their raise is likely be in preparation for the two most anticipated streaming launches of the last few years: whatever Apple is doing with Beats and YouTube’s Music Key.

“Whether or not $400m is enough to defend their position against Apple and Google is yet to be seen…”