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Spotify Seeking $1B Deal
Spotify is working out a deal that would net it $1 billion in convertible debt. The deal would give lenders the ability to convert their investment into equity at a discounted rate if the company goes public, according to the New York Times.
The discount would likely increase if the company waits longer than a year to go public. Private equity firm Texas Pacific Group – aka the majority owner of CAA – and investment firm Dragoneer are expected to contribute the lion’s share of the financing, $750 million of the $1 billion, the Times reported.
Although the Wall Street Journal reported that the company is still not technically a profitable one, it is one of the leaders in “on-demand” streaming and plays an increasingly important role in distributing music to large audiences. The Times reported Spotify can use the funds to invest in ongoing projects and expand their business internationally, and the deal mirrors one brokered by Goldman Sachs for Uber in 2015.