Spotify aims for growth and profits ahead of IPO
Spotify has been promoting its appeals to investors ahead of a stock market listing on 3 April, targeting sufficient growth to fend off rivals like Apple and Amazon while still generating profits.
Chief executive Daniel Ek said the company would prioritise growth over profits but said he can see a “clear path to making money”.
The presentation was aimed at reassuring possible investors of the stability of the business and the low risk of being economically affected by unexpected volatility.
“You won’t see us ringing any bells or throwing any parties. Since Spotify isn’t selling any stock in the listing, we’re really entirely focused on the long-term performance of the business,” said Ek.
Although Spotify’s revenue grew 39% to 4.09bn euros in 2017, their costs of 855m euros pushed up operating losses to 378m euros from 349m the previous year.
The listing will minimize these losses and will enable to convert debt holdings into equity.
Ek said Spotify can compete with giants like Apple and Amazon that have their own music streaming platforms. With 71m subscribers at the end of 2017, Spotify is the leader in this market and it said that its free service that generates a stream of converts to the paid platform will keep it ahead of Apple.
It also recently announced it was planning on testing its own voice assistant to control user’s music.
The listing price of the shares was not specified but Reuters reported that they will be valued roughly at $19bn.