TPG and Goldman Sachs in $1bn convertible loan for Spotify

The Wall Street Journal reported the deal included provisions that the lenders would receive stock options with a 20% discount to Spotify's listing price if listed within a year, with a 2.5 percentage point increase for every additional six months the company does not float. The coupon was reported at 5%, rising by a percentage point on the same terms as the share price discount mechanism.

According to reports, the transaction will be completed by the end of the week.

While the company has not formally announced the funding round yet or to what end it will deploy the capital, it has fuelled rumours of one or more impending acquisitions - with Tidal, Soundcloud and Pandora among the speculated targets.

Previous funding
Spotify last raised funding in June 2015, when Baillie Gifford, Lansdowne Partners and Rinkelberg Capital led a syndicate of investors in a $526m round for the music streaming service.

Having first received VC backing in 2008, Spotify's equity fundraising totals nearly $1bn, excluding loans such as Goldman and TPG's new $1bn note.

Company
Founded in 2006, Spotify develops a digital music streaming service that gives on-demand access to songs on computers and mobile devices.

Headquartered in Stockholm, the company has additional offices in Australia, Belgium, Germany, Denmark, Spain, Finland, France, Italy, the Netherlands, Norway, Poland, Sweden, New York, Hong Kong and Mexico.

People
Spotify – Daniel Ek (CEO).

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