Spotify has already been facing lawsuits over claims it doesn’t have full licenses for songs, and word came just this week that it was facing a $1.6 billion copyright lawsuit from Wixen Music Publishing. It could be difficult to attract those all-important investors if there’s doubt of whether or not Spotify is on solid legal ground, or will have to pay extra licensing fees. An impending IPO might push Spotify to settle or otherwise wrap up lawsuits quickly.
Whenever Spotify does go public, it promises to be a big deal. The company is still struggling to turn a profit, and an IPO could give it the resources it needs to make that happen. Also, it’s facing mounting competition from the likes of Apple, which has very deep pockets that help it buy loads of exclusives and massive ad campaigns. While Spotify has a comfortable lead in paid subscribers, it might need the cash from an IPO to stay ahead.