Music-streaming service Spotify announced that it has signed 15 million paid users in January, up 50% from the number of paid members it registered in May 2014.

The announcement was issued even as Spotify had argued with investors and record labels that free services are key to attracting new subscribers.

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Spotify also said that it had generated US $842 million in revenue in 2013 and has paid US $2 billion back to the music industry, despite claims that it does not fully compensate artists for their work.

Major record companies, including Sony Music Entertainment, Universal Music Group and Warnes Music Group, have been urging Spotify to convert more of its total 60 million active monthly users to paying customers.

Most of Spotify's customers are listening to music for free. The record industry said advertising-based streaming services are not enough to make up for declining sales of CDs and digital downloads.

Analysts also said advertisers are apprehensive in putting their advertising dollar into Spotify as a recent study showed that most of those who listen to music do not look at the screen, thus limiting the value of the web or mobile advertisement.

Spotify's paid service costs customers US $9.99 per month and allows for offline listening, no ads and improved sound quality. The company pays roughly 70 percent of its revenue for royalties to artists and companies that hold the rights to the music.

Spotify, valued at more than US $5 billion in September, is currently working on a new round of private fundraising aimed at attracting about US $500 million in financing, which will raise the company's valuations to at least US $7 billion.

The private fundraising could mean that Spotify will have to postpone its initial public offering plan, which analysts said, can wait until next year.

Spotify declined to comment on the news about its fundraising and IPO timing.

TagsSpotify, Spotify Investment