Spotify Valued At $16 Billion

The Financial Post has reported that private trades in Spotify shares have substantially increased in the past 3 months, and, “according to people familiar with the deals”, are valuing the company at $16 billion.  This is an increase in value of around $3 billion in around 3 months. (‘Private trades’ refers to company stock which is traded privately prior to public listing).

The Post report goes on to suggest that the streaming giant could be worth $50 billion in a few years. Spotify reported net losses last year of $600 million, but with an accompanying increase in revenue to $3.4 billion. The Swedish company have not commented on this report.

With more than 140 million active users, Spotify is the current market leader in music streaming, above rivals Apple, Amazon, Pandora, Tidal, Deezer and SoundCloud. Indeed, these new figures form a stark contrast to SoundCloud which has been the subject of a number of rumours in recent months about its imminent closure. The streaming site had to seek emergency funding earlier this year to continue trading. SoundCloud founder Alexander Ljun announced in August that they had “just wrapped up the largest financing round in the history of SoundCloud. This financing means SoundCloud remains strong & independent. As I said, SoundCloud is here to stay.” Liung also stood down as CEO, handing over duties to former Vimeo CEO Kerry Trainor.

Reuters report that Spotify are likely to float their company on the New York Stock Exchange next year. Spotify’s paying customer base has grown from 5 million in 2012 to over 60 million today.  This latest valuation consolidates Spotify’s place as the music-streaming market leader and also no doubt strengthens their hand in ongoing licensing negotiations with major labels.