Spotify’s Head of Corporate Legal, Peter Grandelius, tells In-House Perspective about a decade of transactions, milestones and challenges as the music streaming platform launches its new audiobook offering.

From playing in a band in his teens to working as a music teacher before university, music has always played a central role in Peter Grandelius’ life. It comes as little surprise then that music finally found its way into his career. After studying law at Uppsala University, Grandelius joined the steady throng of private practice lawyers working in Stockholm and started his career at leading Swedish law firm Mannheimer Swartling. However, he soon realised he wanted more than just a ‘snapshot’ of a company’s M&A transactions.

In 2011, he got a taste for working in-house after securing a role in Siemens’ 800-strong legal team, but Grandelius says he still yearned for a more hands-on position. ‘Quite early on I felt that I needed another challenge and something where I felt that I was more directly involved in what was happening,’ he says. ‘I heard that Spotify was looking for a corporate counsel and was recommended to apply, so I did.’

As an avid music fan, Grandelius says he was ‘a very early adopter’ of the music streaming service. When he heard about the opening, he jumped at the chance to join the company’s growing legal team. ‘It didn’t take me long to decide that I wanted to accept their offer, which I did in late 2012 and I had my first day at the office in the first week of January 2013. I’ve been with Spotify ever since.’

As Spotify relies on obtaining licences from rightsholders, Grandelius says the legal team has always been a crucial part of the business. ‘Legal has always been very important – in fact one of the first employees that Spotify had was our first general counsel,’ he laughs. ‘So legal has always been involved in a lot of things that have happened, which means that we have always constantly worked very closely with the business. We also try to do our best to actually add value rather than being a team that people need to go to [in order to] get a “no” – that’s not what we want to do. That has always been the case since day one.’

When he joined Spotify in early 2013, there were around 10-15 lawyers based in Stockholm, a further six in London and two based out of New York. Today, the team has expanded to approximately 130 lawyers globally. The US, as the company’s fastest growing and largest market, is now its biggest legal hub, with around 50 per cent of the legal team located stateside today.

Spotify’s legal department comprises five different areas: Litigation & Legal Risk (LLR); Products & Services Legal (PSL); Legal Licensing & Business Development; Privacy & Data Protection (ODPO) and Grandelius’ team, Corporate Legal. The 11-strong team includes a paralegal and two assistants and is split between Stockholm and New York. Together they handle all the company’s corporate activities from M&A transactions, capital raisings and fundraisings, corporate listings and filings to corporate governance and real estate issues related to Spotify’s offices worldwide.

Transaction pioneers

Before Grandelius joined Spotify, the company hadn’t embarked on a single M&A transaction. Since joining in 2013 he’s gone on either to work directly on or supervise every M&A transaction the streaming giant has ever done.

The range and complexity of the deals has also been noteworthy. In December 2017, Spotify signed an equity investment deal with China's Tencent Holdings whereby the two companies bought minority stakes in each other’s businesses. As well as giving Spotify coveted access to the Chinese market, Grandelius says the deal raised a number of interesting cultural challenges that kept his team busy.

Probably the most novel transaction for Grandelius came in April 2018 when Spotify made its debut on the New York Stock Exchange (NYSE). Rather than opting for a conventional initial public offering, the company decided to list directly on the NYSE. After going public, its market value was estimated at more than $28bn, making it the largest direct listing by any company at that time.

Although the move caused quite a stir, Grandelius says it was an exciting moment to be involved in such a pioneering deal. ‘Everyone is always afraid of the unknown when you want to do something new,’ he says. ‘There have been a couple of companies that have done it after us, but we led the way there into something new, which was fun and quite an experience. It’s one of the highlights of my career I would say.’

Grandelius’ learning curve during his tenure has been steep, but extremely rewarding, and he wants the rest of his team to have the same experience. ‘I want them to do different things as much as possible, because I think that’s what develops you the most,’ he says. ‘I do need certain expertise, so one of my lawyers is mainly focused on the real estate piece and we have one person who is mainly focused on filings that we do, relations with the Stock Exchange and the US Securities and Exchange Commission, because that’s such a big area and it requires knowledge and a very unique set of skills. Other than that, all the others are doing as much as possible within different roles and on different transactions.’

During Spotify’s first few financing rounds and M&A transactions, Grandelius worked with only a handful of other colleagues to see most deals through to completion. Today, he says, a much larger team is required to handle Spotify’s rapidly expanding portfolio of products. ‘We collaborate a lot with the different teams within legal at Spotify and work with them and outside counsel and experts on M&A in specific jurisdictions,’ he says. ‘But we also have a team of in-house lawyers from Spotify who will be the kind of “bridge” between the external firm to our business and make sure that things that are important to Spotify are being picked up in the due diligence and negotiations.’

An evolving organisation

Grandelius says it has been fascinating to see how the transactions his team have worked on have helped shape the platform’s direction. ‘One of the first transactions that we did was acquiring a company that specialised in curating playlists from humans – basically music experts,’ says Grandelius. ‘After that, we acquired another company that did the same thing, but with machines and e-learning. Then we combined the two, which laid the foundation for how we can recommend and play a new song for you as a user. Seeing the work that you’ve done in that transaction and how it transforms into something that is so important to the company is very interesting and satisfying at the same time.’

Spotify has steadily expanded its service to reach more than 184 markets and Grandelius continues to work alongside internal legal teams and external counsel to manage the myriad of legal challenges that come with operating across so many different jurisdictions. ‘It’s an extremely fun environment to work in because every jurisdiction has its own challenges and its own ways of doing things,’ he says. ‘You can’t be on repeat mode at all when you do these different transactions.’

As the music streaming service has shifted to hosting podcasts and, most recently, offering audio books, the stakes for content moderation have also risen. In October, the company acquired Dublin-based content moderation tech company Kinzen. The acquisition followed Spotify’s growing efforts to deal with harmful content on the platform following the backlash after ‘The Joe Rogan Experience’ podcast attracted heavy criticism over allegations it spread misinformation about Covid-19 (Rogan himself commented that he had no intention to promote misinformation and would ‘balance things out’ going forward).

This deal followed moves by the company earlier in 2022 to establish designated Platform Rules and a Safety Advisory Council ‘to help Spotify evolve its policies and products’ safely while ensuring it ‘respect creator expression’.

As Grandelius points out, Spotify had already been working with Kinzen on content moderation issues for some time. Although his team isn’t responsible for the strategic decision-making behind Spotify’s corporate acquisitions, he says content moderation is a good example of how his team has worked hand-in-hand with other parts of the business to ensure Spotify remains a safe platform for all. ‘Content moderation for music is not as complex as it is for an audio company that we transformed into in 2018,’ he says. ‘Up until 2018, the service that we had was only music and then we transformed into an audio platform,’ he says. ‘The first step of that was to launch podcasts.’

Suddenly, he says, issues like misinformation and misclassification became key considerations for the legal team as well. ‘They became a bigger issue for us, especially since we also acquired a company called Anchor, whereby anyone can record a podcast and then upload it through the Anchor system to our system,’ he says. ‘This was really the first time where we had more user generated content [UGC]. Obviously, we needed to invest a lot of our resources into this specific area to make sure that we didn’t run into a bunch of issues. The acquisition of Kinzen is one step of us expanding that and it’s obviously something that we take very seriously. [Kinzen] fitted very well into our administration and the steps that we wanted to take.’

The advent of Spotify’s podcast offering has presented other legal challenges as well, he says. ‘When we acquired Anchor, we started to get all the UGC on the platform. That was the first time we had that, so then we had to think about what that means for us and are there any things we need to do to comply with all the safe harbour rules around the world.’

Grandelius has enjoyed being part of the launch of these new verticals through M&A transactions and it has also been a huge opportunity to learn new things, ‘because it’s obviously something completely new to Spotify,’ he says. ‘We need to make sure, if we do this, what does that mean, not only from a business point of view, but also from a legal point of view.’

The future of work

Although the pandemic didn’t materially affect the team’s workload, Grandelius says office closures did have a profound impact on how the team worked together. The lack of in-person interactions changed not only the office dynamics, but also removed perks that the team had grown accustomed to during their work for an audio platform, such as artists coming to play sets at the office.

As it turns out, one of the biggest changes to the way Grandelius’ team works had nothing to do with the pandemic. ‘Something that we had been working on for a couple of years before anyone knew about Covid-19 was our ‘Work From Anywhere’ policy that we have launched globally, which means that you as an employee get to elect if you want to work at the office as your primary workplace or if you want to work at home as your primary workplace, or if you want to work somewhere completely different in the world,’ he says.

‘Before the pandemic, most people were at the office five days a week,’ he continues. ‘I would say even people who put the office as their primary workplace are typically not at the office five days a week anymore. Now I would say it’s more of a three-to-four days a week and then one or two days at home, even the people that choose the office as their primary workplace.’

Grandelius believes the flexibility has been hugely beneficial for both him and his wider team. ‘It’s a more flexible and dynamic situation,’ he says. ‘We as a company are investing a lot of time and resources into making what we call a distributed-first workplace to work. Even though we are a very global company, we can’t have offices in every single corner of the world and the places where we have our offices are not exclusive to where the talents are in the world. We obviously want to attract and hire the best people even if they are not located where we have offices. And especially if that person is not inclined to move and leave his or her town, then we still want to be in a position where we can say we’re happy for them to continue to work there in a distributed environment.’

As he approaches his ten-year anniversary at the company, Grandelius says on a personal level he’ll never forget missing the opportunity to reply wittily to an email inquiry from metal band Metallica’s co-manager Cliff Burnstein. ‘I'm a big Metallica fan, so I obviously responded to his email immediately,’ he says. ‘I wanted to write back to him with a quote from one of their songs called Motorbreath, but I didn’t dare to do that, so instead I wrote back a boring, lawyerish answer instead. That’s something that I regret ever since.’

On a professional level, however, he’s amazed to look back and take stock of his role in helping one of Stockholm’s most successful start-ups grow exponentially over the past decade. As he has accomplished many things in a fairly condensed time period and more things than many lawyers get to do in their entire career, it has been an extremely good opportunity, Grandelius reflects. ‘When I joined, Spotify was just a music company,’ he adds. ‘In 2018, we launched podcasts and now we’re launching audio books. Who knows what we’re going to do next, but one thing for sure is we’re definitely not going to stay static.’