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Spotify to raise millions to boost future growth

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Spotify to raise millions to boost future growth
Spotify founder Daniel Ek has never formally indicated an IPO is in the offing. Photo: Spotify
09:11 CET+01:00
Swedish music streaming giant Spotify is close to raising $500m in investor notes in order to underpin projected future growth, the Svenska Dagbladet newspaper reported on Wednesday.
According to the paper, potential investors in the fundraising will be invited to a meeting in Stockholm "next week."
   
The paper added that Spotify "will pay four percent yield" but that there would be an advantage to investors beyond that in the shape of discounts on Spotify shares in the event of a future initial public offering.
   
Spotify did not immediately comment but Svenska Dagbladet said those taking the notes would receive a "spectacular" 17.5 percent discount on the IPO share price should a listing arise within a year.
   
The discount rate would thereafter increase by 2.5 percent every six months, the paper said, showing photo grabs of discussion papers to that effect.
   
Spotify spokespersons were not immediately available for comment.
   
The group, up against strong competition notably from Apple, which launched a streaming service last June, was valued at $8.2 billion after Finnish-Swedish telecoms firm TeliaSonera bought a 1.2 percent stake last year.
   
Speculation about an IPO has been around for some time, though Spotify's Swedish founders,  who own the service though a Luxembourg holding company, have not indicated one is in the offing.
 
Spotify, founded in 2008, boasts more than 75 million active users worldwide, with more than 20 million paying subscribers, in some 60 countries.
   
It has yet to produce annual profits but in 2014 boasted sales of more than a billion euros ($1.1 billion) and is by far the largest company in the growing industry of streaming, which allows subscribers access to unlimited
amounts of music on demand.
   
The sector has grown rapidly as sales of CDs has declined. Revenue from streaming has overtaken that from downloads in 37 countries around the world, according to the IFPI recording industry body
   
Last month, the Beatles back catalogue was made available on a total of nine streaming services, including Spotify, Apple Music and Tidal for the first time.

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