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Business News Digital
Deezer seeking new finance, IPO not ruled out
By Chris Cooke | Published on Wednesday 19 August 2015
Deezer is seeking new finance, according to Bloomberg, with a pitch to potential backers that values the streaming service at around one billion euros, or so say some of those “people familiar with the matter”.
It’s Deezer’s first round of fundraising since 2012, when Warner Music owner Access Industries was amongst those which threw in some cash. The streaming music market remains very challenging, of course, with digital service providers having to make significant royalty guarantees to rights owners while also funding rapid worldwide expansion, plus there’s an increased need to spend on marketing as high profile and well-funded new competitors like Apple enter the marketplace.
For most of the main players in the market, critical mass is key for their business models to become viable long-term, and Deezer is significantly behind its main rival Spotify is signing up both freemium and premium users, despite being in many more markets and making much of its ‘local editorial’ to help users navigate all the music on its platform.
Though like Spotify, bosses at Deezer seem certain that partnerships with tel cos and other tech partners are the way to build a mass audience, and the France-based firm has done plenty of decent deals in this domain over the years.
While you might expect Deezer, like its competitors, to raise this next round of cash from private investors, Bloomberg’s sources say an initial public offering on one or another stock exchange hasn’t been completely rejected as an option at this stage, which would be interesting, given all the speculation of late has been about a Spotify flotation, not a Deezer one. The outcome of a Deezer IPO would be very interesting indeed.
Deezer hasn’t commented on the rumours as yet.
