Music-streaming service Deezer has signalled its intention to list its shares on the Paris Euronext exchange after filing an IPO registration document with the French financial market authority (Autorité des marchés financiers or AMF) on Sept. 21.
The France-based company competes with the likes of Spotify and now Apple Music by offering on-demand and music streaming services online and via mobile phones. Indeed, mobile operators in Europe including Orange, Vodafone, and Deutsche Telekom bundle Deezer music with smartphone plans to attract subscribers. The music service offers a catalogue of more than 35 million tracks and 40,000 news and entertainment talk shows and podcasts.
According to Reuters, Deezer now has 6.3 million subscribers and faces a considerable challenge from its larger rivals as it seeks to build its market share. The IPO would mark a turning point in its strategy as it moves up to the next level. As things stand, Reuters said analysts expect Deezer to achieve a stock market valuation of about €1 billion ($1.1 billion). The IPO is expected to take place by the end of 2015.
Hans-Holger Albrecht, CEO of Deezer, noted that going public is an important milestone for Deezer.
"The IPO will allow Deezer to consolidate our position as a leading global, independent audio streaming service and expand our offering to music lovers around the world," Albrecht said, adding that the music streaming market is "young and growing fast as it becomes the primary distribution channel for music."
In its registration document, Deezer noted that it has received more than €80 million in equity capital investments from third party investors since its founding in 2007, of which €70 million was invested in 2012. The funding mostly came from Access Industries, which is listed as a principal shareholder with around 27 per cent of the company's diluted share capital. Other shareholders include Orange Participations with an 11 per cent stake and Xavier Niel -- founder of Iliad and Free -- with a 3.7 per cent stake.
Deezer also noted that as it has expanded its operations outside of France, the Orange partnership originally formed in 2010 has generated a decreasing portion of its consolidated revenue, from 56 per cent in 2012 to 24 per cent for the six months ending June 30, 2015.
Deezer's revenue increased by 41 per cent in the first half of this year to €93.2 million. By 2018, it aims for positive monthly core earnings (EBITDA) and cash flow and sales of €750 million, Reuters noted.
For more:
- see this Reuters article
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