Spotify is tapping banks for a credit facility that could be the precursor to an IPO being launched.
Bloomberg quotes people with knowledge on the matter as stating that it is talking to a variety of different banks to try and raise the funding that would almost certainly lead to an IPO in the near future.
Two more people that are familiar with the matter commented that Goldman Sachs, an investor in Spotify, is working hard on Spotify’s behalf to arrange the credit facility. When asked about the rumour, spokespersons from both Spotify and Goldman Sachs declined to comment.
Spotify also announced the acquisition of EchoNest, a company that analyses listening behaviour and makes music recommendations, with no financial terms provided.
Music streaming has been growing at a rate of knots over the past year or so with smartphones and tablets connected to the Internet helping to push the subscriber base to 29 million at the end of 2013, according to ABI Research, and that number will increase to 191 million by 2018.
Spotify’s rival Pandora, which is the largest online radio service in the US, successfully floated back in June 2011 and has since seen its shares increase by a huge 146 per cent since its debut and Spotify understandably fancies a bit of that pie.
It struck out a blow to a number of its rivals late last year when it decided to expand its free music offering on smartphones and tablet. Instead of before only being able to listen to Spotify Radio on apps, users can now discover new music, save, shuffle and share, all for the price of a glass of tap water.