Spotify, the world’s largest music streaming service, has filed for an initial public offering today. The sweden-based company has been co-founded by Daniel Ek since it was founded in 2006, and Martin Lorentzon has more than 71 million paying subscribers as of December 2017. The company also has a comprehensive user base, including advertising support for 159m people, far more than rivals such as apple, Google, and tide. Spotify will trade on the New York stock exchange so “SPOT” is the code.
Spotify will offer a direct listing, which means its shares can be traded earlier in the open market, as Spotify does not plan to raise large amounts of money through ipos. According to CNBC, the price of Spotify’s shares in private markets suggests the company could be worth as much as $23 billion.
The filing provides us with the best appearance of the financial services company, one of the company’s revenues last year to 4.09 billion euros (nearly us $5 billion), at the same time the net loss of 1.235 billion euros ($1.5 billion). It also includes the latest update to the total number of Spotify users, with 159 million active users and 71 million premium users per month as of December 31, 2017. Paying subscribers grew 46 per cent last year, while active users rose 29 per cent. Apple’s music, by contrast, still has only 36 million paying subscribers, though it is expected to surpass Spotify this summer.
Although over the years it has been one of the earliest and the most promising music streaming media business, but the company has been struggling to turn a profit, because most of its income to pay licensing fees to the music publishers. Services are sometimes involved in other areas, such as the original video content, but in addition to the monthly membership fees extracted from paying customers and from the audience to get free advertising revenue, it failed to achieve any substantial revenue stream. Neither revenue stream can adequately meet the label’s stringent licensing requirements, and Spotify is forced to negotiate with it to continue offering the same music breadth as it used to.
In January, Spotify filed documents on the New York stock exchange, and the financial times reported that the company had hired Morgan Stanley, Goldman sachs and Allen & co to advise on its IPO. The last time Spotify was valued at $8.4 billion, it raised $400m in 2015.
Update 4:35 PM ET, 2/28: updating the post language to reflect Spotify’s $1 billion IPO number is currently just a placeholder.