A major investor in Spotify has signaled that while a 2017 IPO is likely, “don´t discard the possibility of a sale to Facebook.” He also shared projections that, if correct, would solidify the music streamer’s position as a market leader.
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”We think a US IPO in 2017 is likely but also don´t discard the possibility of a sale to Facebook. Historically, building social networks around its offer has been a week spot for Spotify. In that sense a deal with Facebook would be something positive. It would also make Spotify stronger against Apple, as Apple today doesn’t have a social network connected to its offer”Joakim Dal, an analyst at Swedish Spotify investor GP Bullhound told Breakit.
”Daniel Ek and Mark Zuckerberg know each other well and if Facebook would choose to move into a new area music is very likely.”
Future User Growth & Valuation
Dal is also predicting 50 million paid Spotify users in 2017 , when to music streamer is expected to IPO and 100 million by 2020, based on its current growth curve. “At the end of 2015 was user growth 80 percent now, it approaches 100 percent,” said the analyst.
Dal projects free users in 2017 at 100 million, up from 70-80 million now, and annual gross revenue of $5 billion. ”Our target 2017 IPO valuation range for Spotify is between $15 to 20 billion”, said Dal.
Here is a summary of his analysis including “base” and “best” projections:
chart via Business Insider Nordic