Spotify Is Raising Another $500 Million to Defend Itself Against Apple Music

Courtesy of Spotify

Spotify won’t be going down without a fight: Faced with a quickly growing Apple Music competitor, Spotify is raising another $500 million in convertible debt, according to Swedish media reports (hat tip to TechCrunch).

The new fundraise isn’t your typical equity round, which would involve raising money from institutional investors in exchange for equity in the company. Instead, it’s essentially a loan, with the option of investors converting some of the money into stock at a preferred rate in the case of a public offering.

Spotify hasn’t said when or if it will go public, and it’s unlikely that the company would do so in the current financial climate. Its Paris-based competitor Deezer just cancelled its own IPO late last year, and ended up raising a new $100 million round of funding this month.

However, it’s worth noting that the terms of Spotify’s new loan include a passage that reduces the amount of shares investors could buy in an offering after one year, and then again every six months. This could be seen as a signal that investors hope for Spotify to go public sooner rather than later.

All of this happens as Apple is reporting impressive growth for its own Apple Music service, which launched last summer. Apple CEO Tim Cook revealed during the company’s earnings call this week that Apple Music already has more than 10 million paying customers.

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 1


    Leave a Reply

    1 Comment

    Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

    Fill in your details below or click an icon to log in: Logo

    You are commenting using your account. Log Out / Change )

    Twitter picture

    You are commenting using your Twitter account. Log Out / Change )

    Facebook photo

    You are commenting using your Facebook account. Log Out / Change )

    Google+ photo

    You are commenting using your Google+ account. Log Out / Change )

    Connecting to %s

    1. Nicholas says:

      I’ve thought about it, I would do lots of music for 80k a year and help promote product, and TV . I couldn’t afford to do it full time without a paycheck . I think if I press the issue I could get a call back from the application I filled out last week and I know they got it. Try to see . k I’m hungry and thirsty Thursday I buy a slurpy .

    More Digital News from Variety