LONDON – Spotify, the world’s largest music-streaming platform, could become a public company during the first quarter of this year via what’s called a direct listing. Several media outlets have reported that Spotify secretly filed initial public offering (IPO) documents in late December.
Direct listing would let Spotify avoid the need to court investors or get underwriting by a Wall Street bank or broker. Analysts say if Spotify can go public with direct listing, other companies are likely to do the same.
The news comes on the heels of a massive lawsuit from Wixen Music Publishing Inc. against the company. Wixen filed the $1.6 billion lawsuit against Spotify last week, alleging copyright infringement.
Wixen claims Spotify is using Tom Petty's "Free Fallin'," The Doors' "Light My Fire," and tens of thousands of other songs without a license and compensation. Insiders say it remains unclear how the suit might impact Spotify's IPO plans.
Spotify is a juicy target. It reported revenues of $2.2 billion in the first half of 2017. Reuters reports that in 2017 Spotify had more than 140 million active users and more than 60 million paid subscribers, twice as many as its closest rival Apple Music.
Spotify also has been acquiring companies and is reportedly working to build its content library and expand its tech abilities. One example: its recent acquisition of Soundtrap, an online music studio startup, will let Spotify offer recording software for musicians and podcast producers.