An IPO provides 1) a fundraising opportunity 2) a liquidity event 3) an opportunity to fulfill contractual obligations
One of the conditions of their recent debt financing was that they IPO within a certain time frame. If they believe that they don't need additional funding at the moment or can get better terms then they are simply fulfilling criteria #2 and #3 with their unique IPO. I imagine Spotify can get decent debt financing terms b/c they have such a steady and predictable source of revenue (though not necessarily profit).
> One of the conditions of their recent debt financing was that they IPO within a certain time frame
Spotify is not IPO’ing. They are direct listing their stock. Because of a simple drafting error on part of TPG et al Spotify is side-stepping the bulk of the delayed IPO penalties.
This is exactly why they are direct listing. TPG is screaming bloody murder but then again they claim to be the masters of structuring complex deals so they can’t claim that a startup snuck in a loophole under them.
>" I imagine Spotify can get decent debt financing terms b/c they have such a steady and predictable source of revenue (though not necessarily profit)."
Again if this true, why would they raise a billion dollars in convertible debt?
One of the conditions of their recent debt financing was that they IPO within a certain time frame. If they believe that they don't need additional funding at the moment or can get better terms then they are simply fulfilling criteria #2 and #3 with their unique IPO. I imagine Spotify can get decent debt financing terms b/c they have such a steady and predictable source of revenue (though not necessarily profit).