Spotify may delay IPO to 2018

Spotify has long been seen as one of the more likely candidates among larger tech startups to go public in 2017, but it looks like this plan may be shifting. ASccording to "TechCrunch", multiple sources suggested that the company is now weighing a plan to delay an IPO until 2018. The delay would give Spotify more time to build up a better balance sheet and work on shifting its business model to improve its margins, one source said.

Part of this would include a change to Spotify’s licensing relationship with labels, using the company’s strong growth and position in the current streaming market as part of its leverage, to move from a varied pricing model based on the number of times a track is played to a fixed one. Alongside this, Spotify may also be looking to renegotiate some of its financing that had been pegged to the timing of the IPO.

“Three to five years ago, you could have an IPO based solely on user growth and promises of the future,” one source said. “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”.