For a company that can’t yet turn a profit, Spotify is sure acting like one. It keeps on hiring more people and renting super expensive office space like it’s going out of style. Word comes that it will soon double its UK workforce of 200 people, and that it just rented about 60,000 square feet in London’s very upscale West End near the center of the city close to Trafalgar Square.
This comes months after the company hired 1,000 people and rented four floors in some of the most expensive office space on earth – 4 World Trade Center in New York City.
A lot of industry vets scratch their head at this and think, “No wonder why they can’t make any money.” Considering that its business is online, there doesn’t seem to be much need for a presence in places where a months rent will pay for a year’s worth anywhere else. It now has a presence in Stockholm, Gothenburg, London, New York, San Francisco, and Boston.
That said, Spotify is now moving its R&D to London, so the increase in workers makes some sense. Jobs available in London include engineering for front end, back end, machine learning, data and leadership.
Spotify is also still acquiring other companies as well, the latest being the “online recording studio” SoundTrap. The Stockholm company (as is Spotify) uses a cloud-based platform so that users can record via virtually any device attached to the internet, and collaborate with anyone anywhere. This comes after the recent acquisitions of the French AI startup Niland, UK data/audio recognition startup Sonalytic, TV recommendation platform MightyTV, and blockchain tech startup MediaChain. These acquisitions reported cost the company about $42 million.
Spotify continues to grow in terms of paid subscribers, and it isn’t sitting still. One has to wonder if the expensive real estate is just a show for Wall Street before it goes public, or has some long term strategic importance. That said, the investors are getting anxious and want to see some cash returned soon, which should make for an interesting 2018.