Music streaming service Spotify has announced that they will be going public soon. Spotify has been leading in this industry globally with 71 million paid subscribers and more than 159 million active monthly listeners (MAU) as of December 2017. Their music streaming service is available in 61 countries.
Spotify filed for the documents in December with the United States Securities and Exchange Commission. The company will start trading on the New York Stock Exchange under the ticker name SPOT. As per the information given by the company, their shares have traded as high as $132.50 on private markets. This would give them a valuation over $23 billion based on ordinary shares that are due as of February 22.
The revenue reported by the company is $2.37 billion in 2015, $3.6 billion in 2016 and $4.99 billion in 2017. The company’s paid subscribers are growing at a rate of 46 percent every year and MAUs are showing an increase at 29 percent yearly.
However, in 2017, the company reported a loss of $1.5 billion due to a non-recurring expense owing to convertible notes from a transaction with Tencent in December 2017. The operating loss reported was of $461.3 million 2017 and $425.9 million in 2016.
“We set out to reimagine the music industry and to provide a better way for both artists and consumers to benefit from the digital transformation of the music industry,” the company said in its filing. “Spotify was founded on the belief that music is universal and that streaming is a more robust and seamless access model that benefits both artists and music fans.”
Spotify was founded in 2008 with an intent to provide a new way for users to listen to music through its subscription service that would allow them to pay a subscription fee or get advertisements in order to listen to Spotify’s entire index of content. The company management is headed by co-founder Daniel Ek, who is also the founder of Advertigo, an online advertising firm.
As of now Spotify is facing some challenges in the market. In spite of its dominance all over the world, Spotify’s competitor, Apple Music, is gaining subscribers at a faster rate in the U.S. Also, their dependency on third party licenses from record labels and music publishers may not guarantee a future liaison.