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Looming IPO will turn Daniel Ek, creator of the streaming service, into a billionaire

When Daniel Ek hatched plans for Spotify 12 years ago, he was already a young millionaire, “spraying people with champagne and things like that”. 

After getting rich from a successful marketing start-up, the tech entrepreneur moved to a cabin to meditate on what to do with his life. He decided upon music, which had been ravaged by piracy, as a needed departure from the Ferraris and nightclubs. “You don’t start a music company to become filthy rich,” Mr Ek previously told the Financial Times. 

His long-shot idea has defied the odds, convincing tens of millions of young people to pay for music again — and turning a Swedish technologist into the most powerful music executive in the world. The 35-year-old is barrelling towards a $20bn public listing for Spotify in the coming weeks. Ek owns about 9 per cent of shares, likely making him a billionaire when the company lists publicly on the New York Stock Exchange.

Mr Ek grew up far from Wall Street — in Ragsved, a working-class neighbourhood of Stockholm. His passion for music and computers started early: he played guitar from age four and started his first technology business at 14. Two years later he was earning more than his parents combined. 

Described by the New Yorker as “not long on charisma”, his admirers commend him for being deeply creative, while maintaining a Swedish dispassion that makes his projects practical. 

“When you get up to that level there is always ego that starts to get in the way, but he’s been more interested in learning than in displaying,” says PJ Parson, who has known Mr Ek for nearly two decades. Mr Parson was a board member of Tradera, known as the eBay of Sweden, which gave Mr Ek a senior job while he was still in high school. A tech enthusiast at heart, Mr Ek counts Mark Zuckerberg among his close friends. 

Mr Parson says Mr Ek maintains his low-key demeanour despite the glamour that comes with the music business. “Over the years there were several comments . . . that he should be playing along with the music industry flair. But that’s just not Daniel. He’s not a marketing guy or a label guy.”

Mr Ek becomes more animated when championing his vision for the future of music, taking on a near-religious tone at times. In a 1,237 word letter to investors this week, titled “Our Path”, Mr Ek said he aimed to “create a new paradigm” and “unlock the potential of human creativity”. 

Mr Ek has fiercely defended his vision for Spotify in the face of resistance from the record labels, who control the majority of the world’s music, and from the industry’s biggest stars. Radiohead’s Thom Yorke urged musicians to “fight the Spotify thing”, while Taylor Swift has described the company as “a grand experiment” and “a start-up with no cash flow”.

Scott Borchetta, the chief executive of Big Machine Label Group, Swift’s label, made global headlines in 2014 when he pulled her music off Spotify. In 2018, as Mr Ek’s idea to sell access, not ownership, of music is credited with reviving revenues, Mr Borchetta is complimentary. 

“Daniel is very smart. We’ve always had a dialogue,” he says. “He’s been extremely brave in saying: I’m going to lead this and I believe that I have a platform that can work.” 

Mr Ek, who splits his time between Stockholm and New York, has previously shown little enthusiasm for making Spotify a traditional public company. He told the FT in 2013 that being private was “better in pretty much every regard”. Even now he is opting for an unconventional market debut, foregoing the traditional roadshow and frenzy of an IPO. Instead, Spotify’s existing shares will be listed directly on the market — a strategy that has been reserved for much smaller companies. 

Mr Ek has two children with his wife, Sofia Levander, a writer and former reality TV star. A longtime fan of Arsenal, the football club, his Twitter feed ranges from motivational statements to artist promotions, and he cites interests in genetics and DNA sequencing. 

“I’m not the inventor,” he said in 2013. “But I may be the person that’s dumb enough to go against the system and try to beat it on its own terms.”

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