Last year, employees at Swedish music service Spotify bought shares for €682,000 (US$965,000). Those shares are now worth €32.6 million, thanks to the music service's soaring valuation. But the company is not showing a profit.

In less than a year and a half the valuation of Spotify has tripled. When Sean Fanning, of Facebook and Napster fame, invested in the company in February 2010, Spotify was worth €230 million. After closing a substantial funding round in July the valuation had soared to €774 million, according to documents obtained by Computer Sweden from the Trade Register of Luxembourg, where Spotify's parent company is registered.

Among the winners are Spotify's own employees. They were given the opportunity to buy Spotify stock at the bargain price of €5.5 per share, according to the parent company's annual report for 2010. It is not known how many took the offer, but the music service sold €682,000 worth of shares to its own employees. Today one Spotify share is valued at €267.30, and the stock bought by the employees is worth €32.6 million.

The high valuation is a result of new investments from Digital Sky Technologies, Kleiner Perkins and Accel. Filings from the Trade Register of Luxembourg show the exact numbers: On Feb. 7, Spotify raised €5 million, on June 6 another €55.2 million and on July 19 an additional €13.8 million. On top of this Spotify converted a €22.5 million claim from some of it's shareholders into new stock.

Spotify, which after several delays launched in the crucial U.S. market in July, is still not showing a profit. In 2010, the parent company in Luxembourg made a net loss of €26.5 million. A large part of the costs involved were cash injections and loans to affiliates in Sweden and the U.S. Spotify AB in Sweden received €9 million in fresh capital in December of 2010 and Spotify USA LLC was during the year granted loans for a total amount of €14 million.

The annual report also shows why the new funding round was necessary. At the start of 2010 the parent company had €31.8 million in cash. At the end of the year that amount was just €367,000. Two months later the funding round started.

Looking only at the affiliate in Sweden, the numbers look a bit better. The 2010 turnover for Spotify AB was €18 million and it made a €5.4 million profit. Spotify Sweden AB, another affiliate that manages the service's ad sales, had a €9.4 million turnover and made a profit before taxes of €1.4 million.

At the time of the U.S. launch, Spotify had 10 million users, of which 1.5 million were paid subscribers. Previous investors in Spotify include Northzone Ventures, Creandum, Wellington Partners, Hommels Holding and Hutchison Whampoa.