Tencent Music, Spotify’s strategic partner in China, is valued at over $12B

Spotify has finally filed to go public, and in doing so the Swedish company has shed light on another huge music company that has been tipped for IPO — Tencent Music — which is now valued at over $12 billion.

Tencent and Spotify announced a share swap in December that saw each side take an undisclosed slice of the other for strategic purposes going forward. According to Spotify’s filing, it took nine percent of Tencent Music Entertainment (TME) which it valued at €910 million at the time. That translates to a total valuation of €10.11 billion, or $12.3 billion, although Spotify includes 10 percent leeway above and below that figure.

In exchange, Tencent — which became Asia’s first $500 billion business last year — got 7.5 percent of Spotify to become one of its largest shareholders. It bought its stake using a mix of newly issued shares and secondary, but the value of that holding is around $1.5 billion based on a rough $20 billion valuation for Spotify.

Spotify gave a little more insight into how the two companies might work together.

“Spotify believes the Tencent Transactions allow Spotify to invest in the long term potential of the music market in China and, in turn, TME to invest in the long term potential of the music market outside of China,” Spotify wrote in its filing.

Spotify also disclosed that it holds a registered trademark on its name in China. One source close to the company said that Spotify had actively looked into the potential of the Chinese market a number of years, going as far as sending engineers and business development staff to meet with prospective partners.

In Tencent, it has found perhaps the most ideal partner should Spotify decide to pursue opportunities in China.

Full story : https://techcrunch.com/2018/02/28/tencent-music-spotify/