Spotify has reportedly filed for its highly anticipated IPO with the U.S. Securities and Exchange Commission (SEC).
The streaming service, which is said to have gone ahead with a direct listing over a traditional float, looks set to list in Q1, according to a report from Axios.
There’s no official word from Daniel Ek’s firm, which appears to be trying to keep the news quiet in order to first gauge interest from investors before going public.
Morgan Stanley, Goldman Sachs and Allen & Co have all apparently been contracted to help the streaming company pull off a direct listing – which would allow it to float without the need for fundraising.
A direct listing would see Spotify make its existing shares directly available to the public, bypassing the traditional IPO method of using banks to market and sell the shares.
According to a recent report from Reuters, the Swedish streaming music company’s market worth currently stands at a whopping $19bn in private trades.
That’s apparently equivalent to over $4,000 per share.
These figures are remarkable when you consider that Spotify, which posted a near-$400m operating loss last year, was being valued at just $1bn five years ago.
According to The New York Times, that billion-dollar valuation was achieved when Spotify secured a financing round of about $100m in February 2011, led by the venture capital firm Kleiner Perkins Caufield & Byers and Russian investment company DST Global.
By May 2012, this reported valuation had leapt up to $4bn, thanks to a new $220m funding round, led by Goldman Sachs with around $100m of investment.
And in October 2014, the New York Times once again took a stab at Spotify’s valuation – suggesting that the firm was now worth around $5bn to $6bn.
In May 2015, we first heard that Spotify’s valuation had hit $8bn – as the firm agreed a $350m funding raise which, according to CNBC, involved another hefty investment from Goldman Sachs.
Today’s news arrives at a tricky time for Spotify: Wixen Music Publishing, which represents hits by the likes of Neil Young and Tom Petty, is suing the firm for at least $1.6bn.
In a lawsuit filed on Friday (December 29), the publisher claims that Spotify is hosting tens of thousands of Wixen-managed songs without a sufficient mechanical copyright license.
For illegally under-paying songwriters while handing “outrageous annual salaries to its executives,” Wixen is seeking statutory damages in excess of $1.6bn – or $150,000 per song – for ‘willful copyright infringement’.
Music Business Worldwide