Spotify adds $1 bln to war chest on way to IPO, source says

LOS ANGELES – Music streaming leader Spotify has raised $1 billion in debt as it looks to buy companies that could accelerate its growth before listing shares on the public market within the next couple years, according to a person familiar with the matter.

The war chest was raised through convertible bonds sold to private equity firm TPG, hedge fund Dragoneer Investment Group and others, said this person, who spoke on condition of anonymity because the deal hadn’t closed yet.

Along with some $600 million in cash on its books now, the funds put several acquisition targets in Spotify’s sights: competitive streaming companies like Deezer, Tidal or Pandora; or connected speaker companies such as Sonos. It’s possible no acquisition will happen.

The bond sale was earlier reported by the Wall Street Journal.