Spotify files IPO in US

Spotify files IPO in US

As widely anticipated, Spotify has filed for a direct listing with the US Securities and Exchange Commission. The filing is for up to $1 billion (£725.9 million).

The direct listing enables the company to purse an IPO without raising additional capital or the need for a bank to underwrite the offer, meaning there won't be an initial set share price. The shares would be listed on the New York Stock Exchange.

While Spotify is the world’s biggest global streaming company and operates in more than 60 countries, Apple Music claims to be catching up in the US. Spotify has 159 million monthly average users and 71m premium subscribers.

Spotify’s revenue in 2017 totalled €4.09 billion (£3.62 billion), according to the company’s filing, up from €2.95 bn (£2.61 billion) a year earlier. Its operating loss widened from €349 million (£309m) in 2016 to €378m (£335m) last year.

In its SEC filing, the company said: “Our mission 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 SEC prospectus summary also outlines how Spotify helped revive the recording industry: “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.”

author twitter FOLLOW Andre Paine

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