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Streaming Giant Spotify Files For Direct Listing, Releases Trove Of Financial Details

NEW YORK (CelebrityAccess) — On Wednesday, Music streaming service Spotify filed paperwork to go public with the Securities and Exchange Commission, providing a detailed look at their business.

Spotify is eschewing the traditional IPO model and instead, opting for a direct listing. Unlike a traditional IPO, Spotify will offer no new shares when the company is listed and will instead offer its existing shares to let the market settle on a price. Initial reports suggest that the company may be valued at $22.6 billion, according to the Wall Street Journal

Spotify’s direct listing debut will be one of the biggest tech listings in recent years, and if successful, will likely serve as a model for other ‘unicorn’ tech companies who may be too risky for investors in a traditional IPO.

The filing, known as an F-1 by the SEC, contained detailed information about Spotify’s business, including streaming revenue, as well as the steep losses the company has endured in recent years.

The filings show that Spotify earned €4.1 billion in revenue for 2017, up 39% from 2016, but the company reported quickly widening losses of €1,235 loss in the same period, up from €539 million the prior year and €230 million in 2015.

Also revealed in the F-1 filing were Spotify’s monthly active users, which the company reports as 159 million as of December 31, and 71 million premium subscribers in December, up from 48 million at the end of 2016.

Per the Wall Street Journal, a standard IPO timeline suggests that Spotify could be trading as early as the final week of March, after the company courts potential investors.

“When we launched our Service in 2008, music industry revenues had been in decline, with total global recorded music industry revenues falling from $23.8 billion in 1999 to $16.9 billion in 2008. Growth in piracy and digital distribution were disrupting the industry. People were listening to plenty of music, but the market needed a better way for artists to monetize their music and consumers needed a legal and simpler way to listen. 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. 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,” wrote Spotify founder Daniel Ek.

“We are the largest global music streaming subscription service. With a presence in 61 countries and territories and growing, our platform includes 159 million MAUs [Monthly active users] and 71 million Premium Subscribers as of December 31, 2017, which we believe is nearly double the scale of our closest competitor, Apple Music.”