Music streaming giant Spotify appears to be gearing to go public. The company has added 4 new members to its board of directors. The new entrants include Tom Staggs, Padmasree Warrior, Shishir Mehrotra, and Cristina Stenbeck.
Of the new entrants, only one (Stenbeck) is a full time investor. The rest are industry veterans. Staggs for instance, was COO at Disney. Warrior comes from Cisco while Shishir Mehrotra was YouTube’s head of product.
The company spent last week doing a lot of things. For instance, it also settled a class action lawsuit with a bunch o songwriters. Reportedly, the company has come to an agreement with them that has cost it somewhere around $43.4 million. There two things were pretty vital before the company could get its IPO off the ground and now, we could hope to see some action.
Spotify was actually supposed to go public earlier this year. However, that IPO could not take of due to the fact that the company’s business model was not quite ready. Even now, the company could be considering going public without an IPO. How is that possible you say? Well, Spotify would list on the market without an offering. And company employees and early investors would be able to sell off their shares directly to investors. This could take place either this year or the next.
The company today has around 100 million subscribers of which, around half pay. That is a pretty significant number. However, they company has a lot of overheads as well and behind every song they stream, there are royalty deals and all sorts of other stuff to be sorted out first. Meanwhile, the company is going to continue to need investor backing for the foreseeable future and as such, it will need to prove that the model it is operating on, is one that will yield returns in the future.