As more and more players enter into the game of on-demand music streaming, Spotify is looking to cement itself as the leader.
Spotify raised an additional $1 billion in convertible debt from TPG, Dragoneer and clients of Goldman Sachs. By raising $1 billion debt rather than equity, “Spotify doesn't have to worry about poor signaling from a down-round raised at a lower valuation than the $8.5 billion it set in June 2015” according to TechCrunch.
“The summary is that Spotify has locked itself into a contract that will start getting much more costly after 12 months. After two years, for example, that $1 billion cash injection could cost the company some $1.25 billion worth of shares and more than $100 million in interest — it's in the company's best interest, then, to go public sooner rather than later,” reported Engadget.
“This financing gives them the strategic resources to further strengthen their leadership position.” The money will be spent on growth and marketing for Spotify.
