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Here are highlights on its progress from Ek’s Friday interview with Swedish newspaper Dagens Industri:
- 2011 revenue grew 160 percent to SEK 1.69 billion ($250 million), DI says.
- But losses grew from SEK 253 million to SEK 402 million ($59 million), DI says. “Those numbers sound reasonable,” Ek confirmed.
- “It is not unlikely that, already this year, we have a turnover of more than SEK 6 billion ($887 million),” he added.
- “The question of when we’ll show a profit actually feels irrelevant. Our focus is entirely on growth. It is priority one, two, three, four and five.”
Spotify is busy signing up users in new countries around the world, front-loading required investment before what it hopes will become a lucrative and dependable subscription business.
In 2011, it raised a big $100 million, its fourth round, for its globalisation ambitions from DST, Kleiner Perkins and Accel, valuing it at $1 billion. Now recent reports suggest the company could seek to raise an additional $200 million or so, valuing it at up to $4 billion.
“At those levels, we would definitely be interested in talking,” Ek tells DI. “We have no need of more capital in the current situation in order to operate the business plan we have.
“But I have learned to always take the money when you do not need the money. If an investor can add strategic value and the valuation is good, we are interested.”
Such a lofty valuation would tend to suggest only the stock market could provide the exit Spotify investors will eventually seek. But Ek tells DI “the stock exchange is not an option for us”.
That may be a stock response, too – of course Ek would say he wants to build the company for the long-term; no exit in sight.
Problem is, if Ek really wants to eschew going public, then a $4 billion valuation narrows the private exit opportunities for Spotify’s investors to a small pool of Facebooks, Googles and Apples. But, in a world where Facebook can pay $1 billion for Instagram with no business model, let alone no profit, that’s not necessarily so crazy.