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Spotify Set To Float $20B Value Tipped

After battling with music Companies Swedish music streaming Company Spotify is ready to float with the Company set to be valued at A$20 Billion if private share trades are anything to go by.

This is around $3.75 billion higher than in similar trades up until June when the Company was still negotiating various music rights, people with inside knowledge said.

Strong demand for the shares and rising subscription numbers at the Swedish business means it could be worth at least $20 billion when it goes public.

Spotify declined to comment.

Spotify, the world’s biggest music streaming company has more than 140 million active users, at around four times its 2016 sales.

But investors and sector bankers not involved with the company said Netflix’s valuation of seven times expected 2017 sales was a more appropriate benchmark, supporting speculation of a price tag of at least $20 billion around listing.

Spotify is aiming to file its intention to float with U.S. regulators towards the end of this year in order to list in the first or second quarter next year, one of the sources said.

While its net losses doubled last year to $600 million, a more than 50 percent increase in revenues to $3.4 billion has raised hopes it is on the right track to make money.

Spotify is pursuing a so-called direct listing on the New York Stock Exchange, allowing existing investors to sell shares without raising money from new ones, sources have previously told Reuters. The move is also aimed at saving hundreds of millions of underwriting fees from investment banks.

Worldwide, music streaming revenue leapt 60.4 percent in 2016, lifting recorded music sales for the second consecutive year after 15 years of decline during which revenue dropped by nearly 40 percent, according to data compiled by the International Federation of the Phonographic Industry.

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