Spotify, the Sweden-based music streaming platform backed by corporates TeliaSonera and Coca-Cola, is considering a public listing of its shares in order to allow investors to exit, Bloomberg reported today.
The company would not issue any new shares or seek to raise funding, but the listing would enable its investors to sell their stock should they wish, according to a person familiar with the company’s plans
Founded in 2006, Spotify runs an online and mobile music streaming service that passed the 50 million subscriber mark in March this year. It has acquired media rights monetisation service Sonalytic and video streaming app MightyTV in the past month.
The company has raised approximately $1.06bn in equity funding, $526m of which came in its last round, a series G closed in mid-2015 at an $8.5bn post-money valuation. Telecommunications company TeliaSonera put up $115m of the funding.
Goldman Sachs, Baillie Gifford, Landsdowne Partners, Rinkelberg Capital, Senvest Capital, DCM, Halcyon Asset Management, GSV Capital, DE Shaw, Technology Crossover Ventures, Northzone and P Schoenfeld Asset Management also contributed to the series G.
Other backers include beverage producer Coca-Cola, Fidelity Investments, DST Global, Wellington Partners, Horizons Ventures, Kleiner Perkins Caufield Byers, Accel, 137 Ventures, Creandum and Lakestar.
Record companies Universal Music Group, Sony Music Entertainment and Warner Music Group also own stakes in Spotify which were agreed as part of licensing deals.
The equity was fortified by $1bn in debt financing provided by TPG, Dragoneer Investment Group and clients of Goldman Sachs in March 2016. It was supplied in the form of notes that can be converted to equity at a 20% discount from the price set when Spotify floats.
The discount increases every six months after the first anniversary, which has just passed and which could give a clue as to why the company is exploring a listing now.