Spotify has raised another $1 billion as the company seeks to increase its valuation as a lead-up to an IPO, likely within the next two years, The Wall Street Journal reported, citing sources.

In June, Spotify was valued at $8.5 billion.

The funding comes in the form of convertible debt—bonds that can be exchanged for stock—from private-equity firm TPG, hedge fund Dragoneer Investment Group and clients of Goldman Sachs. The deal has been signed and is expected to close at the end of this week.

By raising debt instead of equity, the WSJ report points out, Spotify adds to its war chest without the possibility of setting a lower price for its stock, which can sap momentum and hamper recruiting.

Two people briefed on the deal said that if Spotify holds a public offering in the next year, TPG and Dragoneer will be able to convert the debt into equity at a 20% discount to the share price of the public offering. After a year, that discount increases by 2.5 percentage points every six months, the people said.

Spotify also agreed to pay annual interest on the debt that starts at 5% and increases by 1 percentage point every six months until the company goes public, or until it hits 10%, the same people added. TPG and Dragoneer have the option of cashing out their shares as soon as 90 days after an IPO, half of the standard “lockup” for employees and other shareholders.