Spotify, the Sweden-based music streaming platform backed by telecommunications firm TeliaSonera, beverage producer Coca-Cola and several record companies, has confidentially filed to go public, Reuters reported yesterday, citing an unnamed source.
The flotation is set to take place in the US and would be undertaken as a direct listing, allowing Spotify’s investors to sell shares without the company issuing any new stock.
Spotify’s streaming platform is available in 61 countries and had more than 60 million paying subscribers and 140 million active users as of July 2017. Company sources told Business Insider last month it was valued at $19bn in recent private trades.
A direct listing began being mooted as an option for Spotify last year. It would effectively remove the need for underwriters, though the source told Reuters that Goldman Sachs, Morgan Stanley and Allen & Company are helping to organise the listing.
The one significant cloud on the horizon for Spotify could be the $1.6bn lawsuit filed this week by Wixen Music, the publisher that represents artists such as the Beach Boys, Missy Elliott and Rage Against the Machine, alleging it has improperly licensed its clients’ music.
Internet group Tencent bought an undisclosed amount of Spotify shares in a secondary transaction last month, and the company has so far raised $1.06bn in funding. TeliaSonera invested $115m at an $8.5bn valuation as part of its last funding round, a $526m series G in 2015.
The round reportedly included Goldman Sachs, Baillie Gifford, Landsdowne Partners, Rinkelberg Capital, Senvest Capital, DCM Ventures, Halcyon Asset Management, GSV Capital, DE Shaw, Technology Crossover Ventures, Northzone and P Schoenfeld Asset Management.
Coca-Cola reportedly provided $10m of the company’s $100m series E round in 2012, participating alongside Kleiner Perkins Caufield & Byers, Accel, DST Global and Fidelity Investments.
Wellington Partners, Horizons Ventures, 137 Ventures, Creandum and Lakestar are also among Spotify’s existing investors, while record companies Universal Music Group, Sony Music Entertainment and Warner Music Group took a joint stake reportedly sized at 15% as part of a licensing deal.