Spotify, the Stockholm-based company whose music streaming service works in 58 countries is seeking to pick up an extra $500 million from investors in the form of convertible notes, according to a report in Swedish newspaper Svenska Dagbladet (in Swedish) that we have also confirmed with sources. The investment would turn into discounted shares in the company were it to go public.
This newest round of funding would come in the form of a loan, where Spotify will pay 4% on the borrowed money. As this is not an equity round, those who contribute to the $500 million raise will be able to convert that loan into Spotify shares down the line, with a discount depending on the timing of the IPO. If it happens within a year, they would get a 17.5% discount on shares; if it’s more than a year away, the discount will increase 2.5 percentage points every six months.
The IPO, the report says, may be done as a joint listing in Stockholm and the U.S.