Spotify arranges $200M line of credit, possibly positioning for IPO

spotify logo canvasThe company is silent, but Spotify reportedly has arranged a $200-million line of credit. Financial houses Credit Suisse, Deutsche Bank, Goldman Sachs, and Morgan Stanley are reportedly involved, according to VentureBeat. The new borrowing capability fits with other recent Spotify news to indicate that the music service is possibly picking up speed along an IPO runway. Some kind of corporate event (IPO or merger) has been speculated in recent months.

The line of credit increases Spotify’s available-cash position, as did the $200-million investment by a single private venture firm last November. That investment brought Spotify’s total funding to $538-million, and reportedly valued the company at about $4-billion. When so much external money is in a company which carries an unprofitable balance sheet, it sometimes foretells a “liquidity event” such as an IPO, where all the bankers get their money back.

Last week Spotify spent some of its cash ($100-million, according to TechCrunch) acquiring music-data company The Echo Nest.

Brad Hill