Music streaming service Spotify could go public at some point in the fall of 2014, according to Quartz. Rumors of an IPO have been floating around for weeks. And there are a few signs that seem to indicate that the company is getting ready for an IPO.
In February, Reuters found an interesting job opening on the company’s website. Spotify was looking for an External Reporting Specialist to “prepare the company for SEC filing standards. Set up all reports necessary to be SEC compliant.”
Even more intriguing, the FT reported that Spotify received a $200 million credit facility from Morgan Stanley, Crédit Suisse, Deutsche Bank and Goldman Sachs.
While it is quite unusual for big banks to lend money to startups, these four big investment banks wanted to sign with Spotify to have a chance of being the underwriter when the company goes public.
Finally, Spotify recently acquired The Echo Nest for $100 million in order to secure an important part of its service, music discovery. The company didn’t want to let anyone else swoop in and acquire The Echo Nest before Spotify. This way, the algorithm behind the radio feature will be tweaked in house.
Moreover, it is a competitive advantage against Rdio, Mog and others, as many streaming companies use The Echo Nest to power their music recommendations. For now, they can still work with The Echo Nest, but it could change any day.
The key remaining part before the Spotify IPO is revenue outlook. If the company wants to make a compelling IPO, it needs to show that it can be profitable in the foreseeable future.