After upending the music world with its streaming service, Spotify is threatening to do the same to Wall Street with its unusual public listing.
The company is disrupting the historically lucrative IPO business by using a method known as a direct listing. The listing won’t be an initial public offering, as Spotify won’t seek to raise money as it goes public, and will instead float its shares directly onto the public exchange at a price the market determines.
The Swedish company is expected to pay $30 million between three advisers—a fraction of the fees underwriters typically charge—coming at the worst possible time for a business that has been hit by a steep drop in IPO volume as more tech companies seek private financing instead.
The U.S. generated just $7.3 billion in revenue from equity capital markets in 2017, roughly 43% of the inflation-adjusted high in 2000.
The listing is expected to take place in late March or early April, though the timing could change. The big concern among bankers is that the method, if proven viable, could spur other tech startups like Airbnb and Uber to use it as a model.