Charles Arthur 

Spotify ‘in talks on US flotation’

Swedish digital music service Spotify is reportedly talking to investment banks about an initial public offering in the US
  
  

Spotify
Spotify was launched in 2008. Photograph: Dado Ruvic/Reuters Photograph: Dado Ruvic/Reuters

The Swedish digital music service Spotify could be preparing for a stock market flotation in the autumn.

The Stockholm-based streaming service, which was launched in 2008 and is partly owned by the major record labels, is reportedly talking to investment banks about an initial public offering in the US.

The company did not comment but a deal for the Palo Alto-based investor Technology Crossover Ventures to take a stake in Spotify last year valued the company at $4bn (£2.5bn), according to reports.

The company, which claims to have more than 24 million users, a quarter of whom pay for its premium ad-free service, has a $200m credit line from lenders including Morgan Stanley, Deutsche Bank and Goldman Sachs, any of which could take the lead role in a flotation and earn millions in fees. Twitter, Facebook and Zynga all received similar financing deals ahead of their initial public offerings.

Of Spotify's claimed six million paying subscribers, more than a million are in the US. The company charges up to $10, €10 or £10 a month for unlimited ad-free access to its library of more than 20m songs.

About 85% of Spotify's revenues come from subscriptions, and 15% from advertising – almost exactly the opposite of its publicly listed rival, the US-based Pandora, set up in 2000, which gets just 12% of its revenue from subscriptions.

 

Leave a Comment

Required fields are marked *

*

*