Music streaming service Deezer has filed for an initial public offering as it seeks to challenge Spotify and Apple.
The French service, which has 6.3 million paying subscribers, is planning an IPO on Euronext in Paris. Swedish rival Spotify has more than 20 million subscribers and 75 million active users. Its most recent financing round is said to have put a valuation of $8.5 billion (€7.6 billion).
Deezer is seeking funds from investors in a transaction that could value the music service at about €1 billion. The company recorded €142 million in revenue last year, a rise of 53 per cent.
“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,” chief executive Hans-Holger Albrecht said in the statement. “The music streaming market is young and growing fast as it becomes the primary distribution channel for music.”
Founded in 2007, Deezer began its international expansion in 2011 when it launched in the UK. It began signing up Irish music fans shortly afterwards, and has now expanded to 180 countries.
Competition in the music streaming market is fierce. According to research from Enders Analysis quoted by Deezer in its IPO document, streaming music will account for almost half of global music industry retail revenues by 2019, some $9.8 billion. At the last count, that figure was 17 per cent, or $2.9 billion, in 2014.
For years, Deezer has avoided head-to-head competition with Spotify by holding off in the US and focusing instead on expanding in Europe and emerging markets like Africa. The company has teamed up with phone companies to sell its premium subscriptions coupled with mobile-phone packages and, when it did launch in the US about a year ago, it partnered with speaker-maker Sonos and later with Bose.
But the launch of Apple Music earlier this year has intensified competition in the market. The tech giant has turned to streaming services as revenue from music downloads has declined.
Additional reporting: Bloomberg
