Spotify will file an IPO despite a big loss

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Spotify is ready to conduct an IPO (Initial Public Offering). The music streaming service company has filed a document on Wednesday for an IPO worth US $ 1 billion.

Spotify will make a direct stock offer. That means, their shares will be traded more quickly when compared with conventional IPO.

Spotify does this because they want to get large amounts of funds through an IPO. Spotify could have valuations of about US $ 23 billion.

The Swedish company was founded by Daniel Ek, who until now became CEO of Spotify since the company was founded in 2006, and Martin Lorentzon. Spotify IPO documents indicate their financial circumstances. Last year, the company reported revenues of EUR4.09 billion and a net loss of EUR1,235 billion in the same period.

They also reported a number of paid users, up 46 percent from a year earlier, while active users were up 29 percent. Spotify already has more than 71 million paid users by December 2017.

In addition to paid users, Spotify also has free users as much as 159 million people, far more than competitor services made by Apple, Google, Tidal and so forth.

By comparison, Apple Music has only 36 million paid users. However, the streaming service from the iPhone maker is expected to have more paid users than Spotify this year.