The world’s largest music streaming service Spotify has finally filed for an Initial public offering (IPO) seeking $1 billion. The music streaming service will trade under the symbol “SPOT” directly on the New York Stock Exchange making it possible for the company to have its shares available for trading on open markets sooner than a conventional IPO.
In the filing the firm says that its aim is to “unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by these creators.” The filing also shows that the company’s CEO and Co-Founder Daniel Ek owns 23.8% of the business while Co-Founder Martin Lorentzon owns 12.4%.
The music streaming service is currently present in 61 countries with a user base of 159 million monthly active users, showing a 29% growth from last year’s demographics and 71 million premium users with a 46% growth rate. The filing also gives us a look at Spotify’s finances for the year 2017 which estimates at €4,090 million revenue (Almost $4.99 billion) and €1,235 million (Almost $1.5 billion) in net losses.
The company has presented some risk factors which are most likely to affect the business in the long run. The first risk factor/concern mentioned by the company is that “some of our competitors, including Apple, Amazon, and Google, have developed, and are continuing to develop, devices for which their music streaming service is preloaded” giving the competition an ability to easily grow their user base which Spotify doesn’t have since it has no plans for announcing any physical device. The second concern lies with the record labels who usually tend to jack up their prices during re-negotiations.
The music streaming service filed paperwork for its IPO in January. Spotify hired Morgan Stanley, Goldman Sachs, Allen & Co for some advise on its IPO.