Washington: Spotify has raised $1 billion in convertible debt from private equity firm TPG Capital and hedge fund Dragoneer Investment Group, a spokeswoman for the music streaming service said.

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The Wall Street Journal first reported the deal on Tuesday.

The deal is expected to close at the end of this week, Spotify spokeswoman Marni Greenberg confirmed to Reuters.

Spotify is facing increasing competition from companies including Apple Inc`s Apple Music, Pandora Media Inc

as well as newer rivals such as Europe`s SoundCloud Ltd and U.S. music producer and rapper Jay Z`s Tidal.

Earlier on Tuesday, SoundCloud launched a music streaming service in the United States starting at $9.99 per month.