Spotify, one of the world's largest music music subscription services, has obtained a $200 million credit facility from lenders which may indicate an initial public stock offering is in the works, according to a report in the Financial Times. The credit was financed at the end of last year by Morgan Stanley, Credit Suisse, Deutsche Bank and Goldman Sachs.
News broke last week that Spotify was in the process of seeking a credit facility stoking predictions of an impending IPO. In addition, just last month Spotify posted an ad for an "External Reporting Specialist," which required its new hire to "prepare the company for international financial standards," which many speculated was in preparation for a stock offering.
Spotify declined to comment on the report.
According to Spotify, the music service's user numbers were at 24 million—including six million paying subscribers—as of March 2013. The company, which launched in 2008, has raised some $538 million to date in funding, according to CrunchBase.
Spotify’s IPO would follow social media outlets Facebook (Feb. 2012) and Twitter (Nov. 2013) both of which sought and received financial packages as they approached their own IPOs. Pandora, Spotify's biggest rival, saw its IPO rise 146 percent since it went public in 2011.
Last week Spotify announced the purchase of music intelligence platform the Echo Nest for a reported $100 million. Some believed the move would lure potential investors with an asset considered one of the preeminent backend data providers for music servicesand whose clients include some of Spotify's competitors, including Rdio, iHeartRadio, SiriusXM, Vevo and MTV,
According to the FT, last year Spotify sold equity in the company which put its estimated value at $4 billion. While Spotify’s revenues doubled to more than $600 million in 2012, the company has yet to turn a profit due in part to music licensing fees.
Spotify would not be the first technology company to have an initial public offering without having a track record for profitability. Pandora, for example, posted a $1.8 million loss in 2009, the year preceding its IPO. Twitter posted a $64.6 million loss for the September 2013 quarter just prior to its November IPO. Spotify, in its most recent report, posted a $77.4 million loss for 2012, up from $58.8 million a year earlier.