The platinum-selling artist and businessman used his controlling stake in Project Panther Bidco to launch a 464-million-kronor ($56-million) bid for Aspiro, the Swedish-listed company that owns Norwegian streaming service Wimp.
Jay Z's company confirmed the bid in a statement on Friday as competition heats up in the music streaming market.
"I think they will be a better owner to lift Aspiro and its advanced music streaming service to a new level," said Trond Berger, the financial director of Norwegian media group Schibsted, currently Aspiro's majority owner.
At the end of the third quarter of 2014, Wimp said it had 512,000 paying users in Germany, Poland and the Nordic countries.
Spotify 'not worried'
That is a far cry from its Nordic rival Spotify, a pioneer in the streaming music business. The unlisted company boasted 15 million paying subscribers in mid-January and is available in 58 countries.
Norwegian business daily Dagens Naeringsliv reported that Jay Z's company was particularly interested in Wimp's high-fidelity Tidal streaming service which is being launched on the US market.
"The Wimp/Tidal service has the potential for greatness, given that it has high-end audio capabilities," music specialist Simon Dyson at corporate analytics firm Ovum told AFP in an email, adding that the $56-million price tag was "not excessive".
Wimp would need substantial investments to challenge Spotify or US tech giant Apple's widely expected entry into the market later this year after acquiring Beats Music from another rap star, Dr Dre, in 2014.
The deal -- which also included Beats Electronics -- was completed at $3.2 billion.
"The sector is still relatively small and there is room for quite a few big players, for now at least," Dyson added.
"I don't think anyone at Spotify will be worried about the Wimp/Tidal news," Dyson said, stressing that Spotify would likely use a reported round of new private financing to expand even further.
'Apple waiting in the wings'
Spotify has hired US bank Goldman Sachs to raise around $500 million in a new round of funding, the Financial Times reported Thursday, pushing back a stock-exchange listing for the Swedish startup that analysts have long said is around the corner.
The company declined to comment on the report.
"The undercurrent to all this is Apple waiting in the wings," Mark Mulligan, a music industry analyst, told AFP.
"When Apple launches sometime later this year it's going to be the first serious competition Spotify will have."
In addition to several music-related ventures Jay Z has branched out into fashion and last year bought the champagne brand Armand de Brignac which boasts an ace of spades on its label.