* Northzone would like to see Spotify IPO in next few years
* Spotify has 20 mln active users, 5 mln paid subscribers
* Market dominated by Apple's iTunes
By Mia Shanley
STOCKHOLM, Dec 10 Nordic technology investor
Northzone, an early Spotify investor and its biggest shareholder
after the founders, would like to see the online music streaming
service gain a stock market listing in the next few years.
Spotify has 20 million active users worldwide - up 33
percent in less than six months - and counts 5 million users
among subscribers who pay to listen to its music without
"We, meaning Northzone, would assume the most logical way of
building for the long term would be to IPO the company in a few
years time or so," Par-Jorgen Parson, a Northzone general
partner and Spotify board member, told Reuters.
"But, at the end of the day, it is primarily up to the
founders to decide how to best build the company for the long
haul," he added.
Spotify Chief Executive Daniel Ek, a 29-year-old Swedish
entrepreneur who founded the firm in 2006 with Martin Lorentzon,
said earlier this year he was ruling out going public.
Northzone, whose investment portfolio of more than 60
companies also includes lastminute.com, PriceRunner and mobile
payments firm iZettle, does not detail how much of Spotify it
owns but says it is the biggest owner after the two founders.
Start-ups like Spotify initially struggled to secure the
support of the record labels and compete with the might of Apple
But more than a decade on, groups such as Shazam, Rhapsody,
Pandora Media Inc and Spotify have become well
established, delivering tunes to a global audience and helping
grow revenues for once-wary labels.
Spotify, which cuts royalty deals with record labels, said
recently it had paid more than $500 million to the music
industry since its launch - an amount that has more than doubled
in the past nine months.
"It took a long time for the company to be fully accepted by
the labels because they were initially very small and offered a
novel, untested business model," Parson said.
"But now it's been widely published that Spotify represents
the second-largest revenue source on a global scale for the
recording industry ... I would envision them to become the
biggest already in a couple of years," Parson added.
Recent media reports have said Spotify is in the middle of a
$100 million financing round that could value the company at
just over $3 billion, which Parson declined to comment on.
Kleiner Perkins Caufield & Byers, Accel Partners, DST,
Wellington and Horizons Ventures have also invested in the
company in prior financing rounds.