Music-streaming site Spotify AB has raised $1 billion in convertible debt from investors, a deal that extends the money-losing company’s runway but comes with some strict guarantees, people familiar with the matter said. Private-equity firm TPG, hedge fund Dragoneer Investment Group and clients of Goldman Sachs Group Inc. participated in the deal, which has been signed and is expected to close at the end of this week, these people said. ...
Spotify has raised $1bn in convertible debt from investors including TPG, Dragoneer Investment and clients of Goldman Sachs Group. in order to create bonds that can be exchanged for stock. Spotify has indicated that it plans to go public in the next two years, but will pay annual interest on the debt at 5% with an increase of 1% every six months until this happens, or until it reaches 10%. Dragoneer and TPG are set to share in $750m of the deal, with the clients of Goldman Sachs Group funding the rest. Relevance: Spotify, which operates in the same space as InternetQ's Akazoo, is stepping up its expansion plans.