Business Insider has a report saying that Spotify is now looking for investment funding at a rate that would value it at $3.5 billion. That's up from a $1 billion valuation last year.

It's not clear if Spotify will get any takers at that price, and indeed BI's report indicates that some investors aren't taking the funding round seriously. But still, the company persists and it may well find investment at something close to that.

Spotify is a huge success story with over 17 million active users in under a year. Last year, Hulu, a company with a similar business model, albeit for video, nearly sold for $4 billion.

[via Business Insider]