Spotify appears close to doubling the amount of financing it has drawn since it was founded a decade ago. The New York Times, citing people who have been briefed on the matter, reports that the music-streaming company is about to close on a $1 billion deal.
“The money comes in the form of convertible debt, which allows Spotify’s investors to change their securities into equity at a future date, said the people, who spoke on the condition of anonymity because the deal was not yet public,” The Times reports. “By using convertible debt, Spotify obtains the funds, without needing to change its valuation. The terms of the debt, however, may put pressure on the company to go public sooner. The company had an equity value of $8.4 billion last year.”
The report adds: “Funds associated with the private equity firm TPG as well as the investment firm Dragoneer put in $750 million of the $1 billion, with the rest coming from other institutional investors, the people said. The transaction, which was placed by Goldman Sachs, is expected to close on Friday, they said.”