Spotify may turn profit in 2017, strike an IPO

While we’ve known that the Swedish music streaming company Spotify has been posting steady growth in its business, its overall cash flow has been in the negative and it has needed continued investor support.

But one of the company’s first investors and board members has told Reuters that while “growth, growth, growth,” may have been the directive of the past, perhaps “profitability will start to become a priority too.”

Par-Jorgen Parson, general partner at venture capital provider Northzone, expressed hopes that Spotify could turn in black ink as early as next year. That could come in part due to an initial public offering of stock.

“As an investor – and I’ve been in the company now for almost 10 years – we’re looking forward to an IPO at some point in time,” Parson said.

Spotify is currently valued at $8 billion and, if offered on an exchange, would be Europe’s biggest initiation since 2014.

It has posted operating losses for every year of its existence thanks to its market additions and the need to pick up new licenses per territory. But the enormity of its paid subscriber base — 40 million as of late — could finally outpace expenses for the first time. Operations could spill over into China, Russia and South Korea. Spotify will be looking to do more to serve artists next year, including tour planning and ticket and retail promotions.

Parson believes that Spotify co-founders Daniel Ek and Martin Lorentzon have “found their calling in life,” and are in full control of the company’s destiny.

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Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.