REPORT: SPOTIFY VALUE UP TO $16B

Spotify’s valuation is up to $16 billion, Reuters is reporting, about $3 billion higher than estimated in June. The combination of demand and growing numbers of subscribers means it could be worth $20 billion when it goes public in 2018.

Reuters made the calculation based on private trades executed by employees, founders and investors. Spotify would not comment.

The valuation number could easily continue to rise, possibly as high as $50 billion.

Technology investment and advisory firm GP Bullhound, which owns shares in Spotify, conducted a survey that got to that rarified number by noting its continued role as a market leader, and the rise in subscribers to 60 million from 5 million in 2012. Revenues last year were $3.4 billion.

By comparison, Netflix’s valuation of $20 billion is seven times expected 2017 sales. The $13 billion valuation of Spotify in June was based on four times 2016 sales. Those calculations, however, were based on numbers from prior agreements with the three major labels.

Spotify is looking to land a direct listing on the New York Stock Exchange in the first or second quarter next year.