Swedish music service Spotify is close to signing a deal with high-profile investors from the UK and Hong Kong.

Spotify, the digital music service widely tipped as a contestant to the dominance of Apple’s music store iTunes, is close to securing new investment from high-profile investors including Hong Kong billionaire Li Ka-shing's charitable foundation, the Financial Times reported.

Li Ka-shing, Brittish venture capital firm Wellington Partners and other investors are a short way off investing up to $50 million, according to people close to the process.

That would value Spotify at $250 million (1.8 billion kronor), the newspaper writes.

Spotify – legally offering instant access to millions of tracks – is looking to raise money to expand in the US, following the enormous hype in Europe. Launched last year, the music service already has more than a million users in the UK, and more than six million across Europe.

The service is free and supported by advertising and commission from selling downloads. Music fans can sign up for the company's ad-supported free service or a premium service with no commercials that costs 9.99 euros a month.

Last month Spotify submitted an application to Apple's iTunes App Store. If approved, iPhone users would be allowed to stream Spotify playlists on their handsets. The investors hope Spotify will attract more paying users if Apple allows the service to be used on iPhone, Financial Times writes.

The company is also said to be talking with an investor from the record industry. Since Spotify has to pay a royalty for every track that’s being played, regardless of advertising revenues, selling a stake to record label would allow it to negotiate better terms.

Spotify employs 75 people in Luxembourg, London and Stockholm and was formed in 2006 by Swedes Daniel Ek and Martin Lorentzon.