Music streaming service Deezer plans to carry out a flotation on the Paris stock exchange by the end of the year, it said on Tuesday, in a bid to keep up with larger, deeper-pocketed rivals such as Apple and Sweden’s Spotify. The company is expected to record over Euro 200 million of revenue this year, after 53 percent growth to Euro 142 million in 2014.
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Analysts have floating a possible valuation in the range of €1 billion ($1.12 billion) for Deezer, but Chief Executive Hans-Holger Albrecht has been mum on how much money or what type pf valuation the streaming service is seeking according to the Wall Street Journal. Swedish competitor Spotify has over 20m subscribers and 75m active users.
Deezer will use some of the proceeds for marketing and to fund so-called “subscriber acquisition investments”, which seek to directly access individuals to encourage them to sign up to its service. “The music streaming market is young and growing fast as it becomes the primary distribution channel for music”. Deezer CEO Hans-Holger Albrecht told the FT that Deezer is expecting annual revenue to exceed €750m (£542 million) by 2018. Spotify was valued at about $8.5 billion in June this year, when it closed a $526 million funding drive with support from backers including Baillie Gifford, Goldman Sachs Group Inc.
(NASDAQ:AAPL) Music, it is clear that the competition in the music streaming industry is rapidly expanding. The company now has 6.3 million paying subscribers, compared with Spotify’s 20 million. Deezer is now available in 180 countries, however, the bulk of its subscription originate from France. Losses a year ago amounted to €27.2 million, according to the registration document. Three music labels, Warner Music, Sony Music and Universal Music, part of Vivendi, together own about 15 percent of the shares.
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BNP Paribas and Bank of America Merrill Lynch are managing the listing, along with Citigroup and Societe Generale.
