Spotify, the world's largest music streaming service, has requested an initial public offering that values the company in one billion dollars. The Swedish-based company co-founded by Daniel Ek, which has remained its CEO since its inception in 2006, and Martin Lorentzon has more than 71 million users who pay as of December 2017. The company also enjoys a base of general users that includes free listeners of 159 million ads, far surpassing the competition of Apple, Google, Tidal and others. Spotify will be listed on the New York Stock Exchange with the "SPOT" symbol.
Spotify will offer a direct quote, which means that its shares can be traded on the open market rather than with a more conventional initial public offering, since Spotify does not intend to raise a large amount of capital with its IPO.
The presentation gives us one of our best looks so far in Spotify's finances, which the company has in the list of € 4,090 million (approximately $ 4.99 billion) for 2017, although the company still recorded € 1,235 million (~ $ 1.5 billion) in net losses for the year. Also included is the latest update of the total Spotify users, with 159 million monthly active users and 71 million Premium subscribers paid as of December 31, 2017. Paid subscribers grew 46 percent year-on-year last year, while active users increased 29 percent. In comparison, Apple Music only has 36 million paid subscribers, although it is predicted to potentially outperform Spotify this summer.
Despite its success over the years as one of the first and most promising music streaming companies, Spotify has struggled to make a profit due to the tight transmission margins, with most of its revenues dedicated to paying license fees to music publishers. Spotify has sometimes ventured into other areas, such as the original video content, but has failed to materialize any substantial revenue stream beyond the monthly membership fee it draws from paying subscribers and the advertising revenue it earns from listeners. free None of the revenue streams has been able to adequately cover the demanding licensing demands of the labels, with which Spotify is forced to negotiate to continue providing the same breadth of music that it had in the past.
In January, Spotify submitted documents for listing 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 their IPO. Spotify's latest valuation was $ 8.4 billion when he raised a financing round of $ 400 million in 2015.