Spotify raises $1B in funding – report

WASHINGTON, DC, USA – Music streaming giant Spotify has raised $1.0 billion in convertible debt from investors, with strict conditions, the Wall Street Journal reported late Tuesday, March 29.

Private-equity firm TPG, hedge fund Dragoneer Investment Group and clients of Goldman Sachs are taking part in the deal, the paper said, citing people familiar with the transaction.

Convertible debt are bonds that can be exchanged for stock.

If Spotify holds a public offering in the next year, TPG and Dragoneer will be able to convert the debt into equity at a 20% discount to the listing price, the Journal reported.

Spotify will pay annual interest starting at 5%, increasing by one percentage point every 6 months until the company goes public, or it hits 10%, it added. 

Spotify was valued at $8.2 billion in June, when Finnish-Swedish telecoms operator TeliaSonera bought a 1.4% stake.

For several years there has been speculation that Spotify will go public, although the founders have never confirmed this is their plan.

Founded in 2008, Spotify has yet to turn a profit, but announced last week it now has more than 30 million subscribers. – Rappler.com