Spotify is going back to the fundraising well seeking $500-million — this according to unnamed company sources cited by Bloomberg Business. Unlike previous venture investment rounds, Spotify is purportedly seeking a loan which could be turned into shares if and when the company goes public. On that point, the unnamed sources say that an IPO is one to three years away. Spotify has been rumored as a prime IPO candidate for over a year.
Thanks to its fundraising efforts last year, the company was most recently valued at more than $8 billion.
The debt offering, if true, brings to mind Pandora’s convertible debt offering of $300-million in the fourth quarter of last year. Pandora is already a publicly traded company in the U.S. market. Spotify and Pandora are both preparing for a 2016 in which they settle into direct competition as hybrid radio/interactive services with a model that includes both ad-supported listening and ad-free subscription membership. (Pandora will build out its interactive service this year.) A case could be made that the two platforms are settling into a market-leading duopoly for that kind of business.
Another competitor, Deezer, raised $109-million in funding earlier this month.