Spotify's value shot up dramatically in its New York listing on Tuesday, pushing the music streaming giant’s market capitalisation as high as $30bn (£21bn) and making its flotation the third-biggest for a technology company on record.

The Swedish company defied some predictions of a tricky first day on the markets to open trading at $165.90, well above the $132 “reference price” that had been set the night before, although shares later lost some ground to close at around $149.

The flotation had attracted intense attention because of its unusual “direct listing” approach, in which Spotify did not sell any new shares but allowed existing shareholders to sell their holdings with few restrictions.

It had led to fears that the company’s shares would whipsaw on the opening day without the book-building process that typically stabilises an initial public offering.

Spotify, which launched in Sweden in 2006, has never made a profit and faces intense competition, but any lingering fears about its future failed to dampen intense demand for its shares on Tuesday.

It took more than three hours after markets opened for the company to start trading, beating the previous record set by the Chinese retail giant Alibaba’s public offering four years ago, as Spotify’s bankers took their time to gauge the interest of investors in backing the shares.