The world's leading music streaming service has grown into a near-unstoppable behemoth in the industry, as per a new report about the company's valuation.

According to Reuters, recent private trading activity in Spotify's shares is now valuing the music giant at somewhere around $16 billion. Inside sources who are familiar with the recent trades have vouched for this number. This figure is $3 billion higher than similar valuations had revealed prior to June. This new information, coupled with the rising subscription numbers and high demand for the stock, means that Spotify could be worth at least $20 billion when it goes public. Reuters reached out to Spotify for comment but the company declined.

The benefits behind the pre-public market for organization shares is two-fold. First, any big name private company like Spotify, Airbnb and Uber are able make some upfront cash on their "paper wealth" (i.e. - how much their assets could be sold for). Second, it lets investors get a head start on the listing and buy or sell shares based purely on word-of-mouth buzz. Facebook went through a similar situation back in 2012, with their IPO hurting their valuation in the short-term, but they've recently made a comeback and investors are seeing nice returns. Spotify's valuation is sky-high at the moment too, with a $13 billion price tag (lower than the report suggests) making it worth four times its 2016 sales.

“It’s hard to speculate on Spotify’s valuation since we only have historic results prior to the most recent renegotiation with the music majors,” said Louis Citroen, who is an analyst at Arete Research. “But a $20 billion valuation sounds punchy as it implies both that Spotify can continue growing customers at a fast pace, and that it might achieve a double-digit margin. We can believe in the customer growth, but are less sure about profitability given high royalty costs and limited differentiation with rivals on content, price or technology”.

Spotify is pursuing a direct listing on the New York Stock Exchange (NYSE), which would allow existing investors to sell shares without having to raise money from new ones. The move would also potentially save them hundreds of millions of underwriting fees from investment banks. A listing would open the floodgates for similar companies to go public as well, with France-based rival Deezer waiting eagerly in the wings.