Leading US Internet radio service Pandora on Friday filed plans with US regulators for an initial public offering of stock to raise as much as $100 million.
Pandora indicated that it is going public in a bid to get the money it needs to grow and become profitable, and to deal with an accumulated operating deficit of $83.9 million.
"A key element of our strategy is to aggressively increase the number of listeners and listener hours to increase our market penetration," Pandora said in a filing with the US Securities and Exchange Commission.
"However, as our number of listener hours increases, the royalties we pay for content acquisition also increase," the filing noted.
Pandora's revenue has not been enough to offset the cost of paying royalties on songs, and getting big enough to tip the balance with more paid advertising is essential, the startup indicated.
The Oakland, California-based firm released internal financial figures that revealed the company finished last year with a net loss of $16.7 million.
The bulk of Pandora's revenue comes from advertising, while about 14 percent of the money it takes in comes from subscriptions, according to the filing.
Pandora reported having 80 million registered users and that it streamed about 2.1 billion hours of music last year.
Pandora was among the top smartphone applications in the United States in 2010.
Pandora is available for the iPhone, the Blackberry, the Palm Pre, and devices running Google's Android and Microsoft's Windows Mobile operating systems but does not currently provide service outside the United States.
"We have pioneered a new form of radio - one that uses intrinsic qualities of music to initially create stations and then adapts playlists in real-time based on the individual feedback of each listener," Pandora said.
"We believe the promotion of music discovery is one of the reasons why radio has endured as the most popular way to listen to music."
Pandora creates personalized radio stations for users based upon their favorite artists or songs and has seen booming growth on mobile devices, according to founder Tim Westergren.
He told AFP in an interview last year that Pandora would be "getting into cars and into electronic devices at home."
Westergren said that the folks at Pandora were "not huge believers" in subscriptions although Pandora does offer a paid premium service which allows for unlimited listening beyond the monthly 40-hour limit on free accounts.
Westergren said Pandora's biggest competitor remains broadcast radio. "They own 90-plus percent of the market," he said.