Streaming giant Spotify is now worth $16 Billion

Streaming giant Spotify is now worth a staggering $16 billion, according to private sources. The figure has jumped by $3 billion since July this year, adding strong demand for shares and rising subscription numbers.

Spotify‘s growth is unprecedented, putting it atop of the streaming market. The number of paid subscribers has dramatically increased from 5 million in 2012, to 60 million today. Combine that with the extensive number of shareholders, and Spotify is on track to reach a net worth of $50 billion in just a few years. In addition to this, last year, Spotify posted a net loss of $600 million, but produced an insane $3.4 billion increase in revenue.

Given these numbers, Spotify is estimating a $20 billion valuation when it goes public, however, this may be a bit of a stretch. Arete Researcher Louis Citroen believes that an estimation of that magnitude, suggests that Spotify expect growth numbers to continue to rise as they have over the past few years. However, high royalty costs and limited differentiation with rivals on content, price or technology may prove to be a rather significant roadblock.

To see the full analysis, click here.