Internet music streaming service, Spotify, more than doubled revenues in 2012 to 435 million euros ($577 million) due to its expansion to new markets and with it, it almost doubled its user base, documents have shown on Wednesday.

The Stockholm-based business, which provides a free on-demand music service with advertisements, or ad free music for paying customers, has posted a 58.7 million euro net loss, compared with the 45.4 million loss it had in 2011 on turnover of 190 million euros.  These figures were filed by its holding company Spotify Technology in May 2013 and published on the website of the registry of companies in Luxembourg, where the group is registered, last Wednesday.  The unlisted company, which boasts more than 20 million “active” users and over 5 million paying subscribers and has received financial backing from the likes of Kleiner Perkins Caufield & Byers, Northzone, Accel Partners and DST, has not ruled out further fundraising activities to support its market expansion.  “We cannot exclude the need or desire to raise more funds in the future to fund future growth initiatives,” a spokesman has said.

Spotify

Spotify was founded in 2006 by Swedes Daniel Ek and Martin Lorentzon and strikes royalty deals with record labels which then pays about 70 percent of its revenue back to rights holders.  Streaming and on demand music services has soared in popularity along with smartphone use, but companies like Spotify and US company, Pandora, which has almost 68 million active listeners, have struggled to make profits due to the high cost of royalty fees.  The sector has attracted keen interest from global technology giants like Google, Amazon.com Inc and Apple Inc which see music streaming as crucial to grow their presence in a smartphone-dominated media world, as we have recently seen by Apple’s latest offering iTunes Radio.

Spotify said that it almost doubled the number of monthly active users during 2012 as it launched in countries such as Germany, Australia, New Zealand and Ireland.  This year, Spotify made its first forays into the Latin America and Asia markets.

($1 = 0.7547 euros)

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SOURCE: http://uk.reuters.com/article/2013/07/31/us-spotify-results-idUKBRE96U0QZ20130731