Photographer: Michael Nagle/Bloomberg
technology

Tiger Global Among Top Spotify Holders With $1.9 Billion Stake

  • Chase Coleman’s firm is said to have invested $700 million
  • Music-streaming company rises after unusual trading debut

Chase Coleman’s Tiger Global Management owns nearly $2 billion of Spotify Technology SA, making it one of the biggest shareholders of the music-streaming company that started trading Tuesday.

The venture capital unit of New York-based Tiger Global owns 12.8 million shares, or 7.2 percent of the company, according to a March 20 filing. The business had about $700 million invested in Spotify before it went public through a direct listing, according to a person with knowledge of the matter.

Spotify shares closed about 10 percent below the opening price, at $149.01 each, valuing the startup at almost $27 billion and Tiger Global’s holding at $1.91 billion. The investment firm hasn’t sold any shares, said the person, who asked not to be identified because the information isn’t public. The position makes Coleman’s firm the fourth-largest holder of Spotify, following co-founders Martin Lorentzon and Daniel Ek and Tencent Holdings Ltd., filings show.

Tiger Global’s $11 billion venture capital business, led by Lee Fixel, started its investment in Spotify in 2015 and expanded it into one of the unit’s biggest positions, the person said.

A spokeswoman for Tiger Global, which also has a hedge fund business and oversees $22 billion overall, declined to comment.

Rare Route

Spotify took an unusual route to going public through the direct listing. The company skipped the traditional initial public offering process -- in which the firm and potentially some existing investors offer a certain amount of shares at a valuation they think the market can handle. Instead, the first public share price was based solely on supply from existing shareholders wanting to sell stock, and the demand for it.

The stock traded as much as 28 percent above the $132 reference price that had been set by the New York Stock Exchange well before the price discovery process started. Its first true public valuation based on share supply and demand was the opening at $165.90.

Coleman’s firm, which started in 2001, has been active in tech wagers before. Tiger Global was an early investor in both Facebook Inc. and LinkedIn Corp. It was invested in Microsoft Corp., Amazon.com Inc., Netflix Inc. and Alphabet Inc. as of Dec. 31, filings show. Coleman, 42, who was a technology analyst at Tiger Management, is one of the so-called “Tiger cubs,” the term used for alumni of billionaire Julian Robertson’s firm who started their own hedge funds.

— With assistance by Alex Barinka

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