After finalizing a deal to raise $400 million, the insanely popular music streaming service, Spotify, now sits among the elite private ranks of Uber, Snapchat, Airbnb, and Palantir. The newly announced private investment round, led by prestigious Goldman Sachs (GS), indicates that high profile Middle Eastern investors, in addition to traditional American VC firms, want in on Spotify's "Napster-like" business proceedings. This new round of funding, according to familiar sources, values Spotify at $8.4 billion. It may also signal the end of longstanding Pandora (P) Music, which has mightily struggled over the past year. While Pandora can be partly credited with launching the music streaming industry, it has since failed to adapt to new market conditions and competition.

Spotify launched onto the music scene in 2008. Since then, it has accumulated 60 million active users and 15 million paid subscribers. Spotify has tirelessly worked to expand its music streaming empire via strong marketing campaigns, many of which have been overshadowed by Taylor Swift's disdain for the company (for allegedly underpaying musicians). Nevertheless, many American universities contain at least one Spotify "campus representative," a seemingly meaningless position, to promote the music service.

Many analysts believe this new $400 million round of funding is in response to the rise, and popularity, of new music streaming services. For example, the inevitable launch of Apple’s (AAPL) Beats music service will immediately contend with Spotify, and likely steal mass market share from the music streamer. In addition to Apple's Beats streaming app, Jay-Z’s recently purchased music streaming service, Tidal, could also prove a strong competitor. Tidal’s investors include Madonna, Kanye West, and Beyonce. With these celebrities endorsing Tidal, with the exception of Kanye, many music streamers are likely to join the Tidal bandwagon.

Even more surprising, this new $400 million capital injection could signal the end for longtime competitor Pandora. Pandora’s popularity has steadily declined in recent years. Astonishingly, Pandora is currently valued at $3.55 billion, which is less than half of Spotify's newly minted valuation. Not only is Spotify's song library superior, but its ability to allow users to choose songs greatly outperforms Pandora’s "suggested" music strategy. In other words, Spotify has consistently responded to consumer demands, whereas Pandora continues to push its own unpopular business agenda. Perhaps this is why Spotify is on the rise and Pandora is inching its way to the grave.