Dive Brief:
- Spotify hired Sheila Spence as vice president of corporate development per Recode. Spence was described as a longtime M&A specialist at ad giant WPP running corporate development, and will report to Spotify CFO Barry McCarthy.
- The streaming music company is expected to go public within the next 12 months via a direct listing of its stock rather than the more traditional IPO with a currently reported valuation of $13 billion.
- Recode’s reporting pointed out Spotify has so far been conservative with its acquisition strategy, typically looking to add engineering teams, but that the cash influx from a public listing would give Spence a working budget for M&A activities.
Dive Insight:
The Recode report didn’t detail why Spotify is planning an unconventional direct listing and eschewing the dog-and-pony show of an initial publich offering. It's possible Spotify is concerned that institutional investors remain gun-shy about tech companies. The more measured attitude toward the space has been evident for a couple of years and wasn't helped by Snap Inc.’s highly anticipated IPO earlier this year that led to an almost immediate sell-off from the opening price and enduring challenges for the stock price. Not to mention Twitter's ongoing woes.
As Spotify looks to expand its technology and advertising platform, acquisitions will likely become a more important piece in beefing up those capabilities and helping it remain competitive against Apple Music, Pandora — which may be exploring a sale — and others. Recent Spotify acquisitions include Paris-based AI startup, Niland, and its largest deal was around $60 million for music data startup The Echo Nest.
Spotify has been active in partnerships for advertising and technology as well. Last November it teamed with WPP’s Data Alliance providing the agency with access to Spotify’s user data, and in March it teamed up with Waze to bring the core functions of each app into the other.
