Sweden-based music streaming service Spotify filed for a public share offering yesterday in which its investors, which include several corporates, will be able to sell up to $1bn in shares.
Founded in 2006, Spotify runs an online streaming platform with 159 monthly active users and 71 million paying subscribers across 61 countries and territories as of the end of 2017. It made a $1.23bn net loss in from almost $4.1bn in revenue last year.
The offering will not involve the company issuing any new shares but will allow its investors to divest part of their stake on the New York Stock Exchange while creating a market for its stock.
Tencent, the China-based internet group with which Spotify executed an equity exchange in December 2017, owns a 7.5% stake having acquired the shares through a secondary purchase, while Sony Music, part of electronics and entertainment group Sony, holds 5.7%.
Other notable shareholders in the company include co-founder and CEO Daniel Ek (25.7%), co-founder and vice-chairman Martin Lorentzon (13.2%) and investment firms Tiger Global Management (6.9%) and Technology Crossover Ventures (5.4%).
Spotify had raised roughly $1.06bn in equity financing prior to the Tencent deal, having closed a $526m series G round in 2015 featuring telecommunications company TeliaSonera, which acquired a 1.4% stake, valuing Spotify at $8.53bn.
Goldman Sachs, the investment banking firm that provided funding for Spotify in 2012, also took part in the round, as did Baillie Gifford, Landsdowne Partners, Rinkelberg Capital, Senvest Capital and Discovery Capital Management.
Beverage producer Coca Cola, Fidelity Investments, DST Global, Wellington Partners, Horizons Ventures, Kleiner Perkins Caufield Byers, Accel, 137 Ventures, Creandum, Northzone and Lakestar are also past investors.
Record companies Universal Music Group and Warner Music Group had reportedly joined Sony in taking a combined stake worth about 15% at an earlier stage, as part of a licensing agreement. However, it is unclear how many shares the two currently own.