Spotify Reportedly Holding Off on IPO Until 2018

Spotify-iOS-App.jpgMusic streaming service Spotify may delay its IPO until 2018, giving it more time to improve finances and business model.

TechCrunch reports that sources say Spotify will work to change its licensing relationship with labels – using its position in the streaming market as leverage to change its pricing model to a fixed one, rather than one based on the amount of times a track is played. Spotify may also, apparently, be looking to renegotiate some of its financing linked to the IPO.

“Three to five years ago, you could have an IPO based solely on user growth and promises of the future,” one source told TechCrunch. “But the financial climate has changed now. Today you have to show some path to profitability, especially at the valuation that Spotify has been targeting. That may have caught up with the company a bit.”

The last publicly reported valuation for the service was $8.53bn (£6.82bn), back in June 2015. Despite this, a source claims that those inside Spotify are looking for an ‘emotional target’ between $11bn and $13bn for the public offering.