Spotify may be the largest streaming service in terms of user numbers, paying subscribers and by essentially every other metric, but that doesn’t mean things are going perfectly. 

The Swedish streaming service released its annual consolidated financial statements for 2016 this morning, and the document shows both how much the company has grown in just 12 months, as well as some serious financial woes.

In terms of revenue, the popular platform brought in just under $3.3 billion worldwide. That’s an enormous number on its own, and it’s even more impressive considering it represents a 52% rise from 2015, when the company earned about $2.15 billion in revenue. In 2014, that number was just slightly over $1.2 billion, so the growth pattern here is obvious and initially encouraging.

That figure is almost half of all streaming music revenue in the world, which rose to $7.6 billion in 2016. Other services such as Apple Music, Pandora, iHeartRadio, Deezer and even Tidal contributed to that cumulative total, but it is clear that Spotify is responsible for the majority of the entire industry.
While more money is coming in the door, all is not going well for the tech firm. Revenues may be growing by leaps and bounds, but unfortunately so are losses, and the latter are increasing at even faster rates. In 2016, Spotify lost just over $600 million ($601.4 million), up significantly from 2015, when losses were already being highlighted as a serious issue for the company. The year prior, the Swedish musical giant lost just under $258 million, which means that losses increased by an incredible—and terrifying—133%.

In just the past few years, Spotify has all but taken over the music industry, and it now dominates the ever-growing field of streaming, which has been identified as the savior of the business (in some ways, at least) and one of the names that has altered how hundreds of millions of music fans listen to their favorite artists.
Considering its financial woes, as well as its promise of continued growth and expansion around the world, it’s not difficult to understand why Spotify has been continuously looking for injections of cash to keep the lights on. In 2016, the Daniel Ek-led startup (a term that might not apply much longer, if it even does at this point) collected $1.5 billion between debt financing and a convertible note, and that figure doesn’t take into account two other rounds where the amount raised wasn’t revealed publicly.

Spotify has been slowly working towards going public lately, and that long-awaited IPO (if that's what the company chooses to go for) may take place by the end of the year, and while nobody was expecting the streamer to be profitable just yet, that is something that will become more and more once there are more people to whom the streaming platform needs to answer.

Source: Forbes