Spotify has struck a multi-year licensing deal with the digital rights agency that represents more than 20,000 independent record labels, the latest step in its path towards a public listing.

The leader in music streaming signed an agreement with Merlin, Spotify’s fourth largest supplier of songs, which represents independent labels such as Beggars Group, whose artists include Vampire Weekend.

Spotify has been in tough talks to renew contracts with the big three music labels — Universal, Sony, and Warner — which own the majority of its 30m songs. Earlier this month Spotify inked a deal with Universal Music, the world’s largest record label, in what was viewed as a significant step towards going public.

The lossmaking service is striving for a sounder financial footing ahead of an IPO, as it looks to convince investors it can translate fast customer growth into a sustainable business.

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