Business News Digital Management & Funding Top Stories

Deezer’s IPO is off

By | Published on Wednesday 28 October 2015


Having gone from rumoured IPO to confirmed IPO to scheduled IPO in super-speedy time, streaming service Deezer suddenly put the brakes on last night, and withdrew its initial public offering from the Euronext Paris stock exchange.

Deezer was due to float on Friday, looking to raise over €300 million with a €1 billion valuation. The money would have financed new marketing and expansion initiatives in an increasingly competitive marketplace, where the French firm competes head-on with the better financed Spotify and Apple Music (in its latest mega-bucks financial update, Apple announced quarterly net profits of $11.1 billion yesterday).

But last night the Deezer IPO was cancelled, with “market conditions” being blamed for the sudden change in plan. Various developments on the investment markets maybe included in that excuse, though, according to the Wall Street Journal, chairman of the Deezer board, Didier Bench, admitted that the slump in Pandora’s share price in the US last week was a particular concern.

As previously reported, the American streaming service’s shares took a knock after the company published its latest financial report, despite decent revenue gains, and losses more or less in line with expectation. It was a slowdown in user growth that seemed to spook investors, who possibly worry about the future fortunes of standalone streaming music businesses now that cash-rich Apple is fully on their turf, while Amazon and YouTube battle for the mid-market.

Bench added that the market’s reaction to Netflix’s most recent and slightly disappointing third quarter earnings was also a factor, adding that “it’s better for us to wait a bit”. The official word is that the Deezer company will now “review its fundraising options”, while Bench insisted that “we have money and we continue to grow”.

It’s no secret that the firm is operating in a challenging market. Documentation published ahead of the IPO confirmed that a fair chunk of Deezer’s premium subscribers were actually inactive mobile-bundle customers. And while that is still income, the company has altered its partnership with key mobile partner and investor, Orange in France, and is now seeking to sign up more direct subscribers in its biggest market.