Spotify has finally filed for an initial public offering after months of rumours and speculation. While this move, allows the company to to raise a large amount of capital, it isn’t necessarily targeting that with the IPO filing.
Spotify is seeking a direct listing that would enable its shares to be traded sooner compared to the conventional IPO. Currently, Spotify is valued at $19 billion according to Reuters.
The IPO listing also gives some updates about the company’s performance. The total user base for the music streaming platform. As of 2017, the platform has amounted to 159 million monthly active users. With 71 million of them being Premium subscribers. This translates to an increase of 46% for active paying subscriber and 29% increase in total active users. With that numbers, Spotify has set itself as the biggest music streaming platform in the world, far outpacing the number of users of its competitors like Apple, Google and Amazon.
Despite the healthy grows of subscribers, Spotify generates revenue nearly $5 billion last year with a net loss of around $1.5 billion. The Verge reports that Spotify’s struggle to make a profit is heavily due to the small margins of the business, given that most of the company’s revenue will be paid for the licensing fees to music companies.
It’s not clear on how bright Spotify’s future will be. However, with the large user base under its belt, it certainly have something going for it.
(Source: The Verge)