Spotify has reportedly declined an offer by Chinese internet giant Tencent earlier this year to acquire the music streaming service for an unknown amount, according to a new report by TechCrunch. The report cites sources familiar with the discussion held between the two companies and claims that the move was seen as an attempt by Tencent to expand its music business to other territories beyond Asia, though there were no guarantees that Spotify would have gained access to customers in China in return had the deal moved on.
It largely remains unclear how far the talks have gone or whether the discussions had included details about the price of acquisition. Both Tencent and Spotify remain mum on the deal and why it failed, but it is likely that the Chinese company's bid to buy the Manhattan, New York-based provider of music, podcast and video streaming faltered as Spotify is planning to file for an initial public offering, though it is not yet confirmed when the company plans to go public. The company has long been speculated to be aiming for an IPO sometime in the future on the Nasdaq stock market as a way to raise more money and further boost its growth. While Spotify has been in existence for more than ten years now and currently caters to over 120 million active users – 60 million of which are paying subscribers as of July 2017 – the company does not currently generate huge profits, though its recent growth indicates another milestone for the service seeing how it managed to add 10 million paying users to its ecosystem in just five months. At present, it largely depends on funding by private investors who continue to believe the service stands for a significant growth in the near future.
Spotify has been using the funding it receives over the years to fuel its growth and boost the service's profitability. The company's consideration to go public suggests that those efforts may finally begin paying off for investors and the service as well. However, it would have been interesting to see whether the acquisition by Tencent would have been more favorable for Spotify over the long term, though that prospect is now highly unlikely given how the music streaming service turned down the bid.