Spotify AB has raised £695 million (~$1 billion) in convertible debt, and reportedly promised its investors that they would get a tasty equity return if the Sweden-based music streaming service goes public in the next year.
Private equity outfit TPG, and hedge fund Dragoneer Investment Group, along with an unknown number of Goldman Sachs' clients, agreed to sink cash into Spotify, according to the Wall Street Journal. The deal was later confirmed by Spotify, with an agreement expected to close by the end of this week, Reuters reported.
Financial terms were kept secret. The WSJ earlier reported, however—citing sources familiar with the deal—that Spotify's new investors would be able to convert the debt into equity at a 20 percent discount if the company holds an IPO (initial public offering) within the next 12 months.
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