Music streaming leader Spotify is now valued at $16 Billion, up $3 Billion since June of this year. The rise is reportedly due to the private sale of shares that increases the companies worth.
According to Reuters, it may rise again to over $20 Billion if growth continues. “But a $20 billion valuation sounds punchy as it implies both that Spotify can continue growing customers at a fast pace, and that it might achieve a double-digit margin. We can believe in the customer growth, but are less sure about profitability given high royalty costs and limited differentiation with rivals on content, price or technology”.
The Swedish company, which now employees over 1,600 people and has 140,000,000 active users is rumoured to be considering an IPO next year.