According to British newspaper The Financial Times, the Swedish startup has hired US bank Goldman Sachs to raise around four billion kronor ($500 million, 440 million euros) in a new round of funding, pushing back a stock-exchange listing analysts have long said is around the corner.
"We are not commenting on this story," Spotify's communications director Alison Bonny told the news agency AFP.
Earlier this week Spotify announced it would replace Sony's music streaming service on the Japanese technology giant's tablets, smartphones and gaming consoles starting this spring.
In mid-January the company reported it had 15 million paying listeners worldwide and that it had continued to turn a quarter of all users into subscribers.
The controversial music service has come under fire from artists like US pop star Taylor Swift and Radiohead's Thom Yorke for inadequate artist compensation.
Spotify founder Daniel Ek hit back at Swift on his blog, saying it had paid out $2 billion to artists and record labels since it launched in Sweden in 2008.
The unlisted company – which rarely reports its figures – has yet to turn an annual profit and says 70 percent of its revenue goes to record labels and artists.