Deezer CEO Hans Holger Albrecht
Deezer cancelled their planned Initial Public Offering (IPO) in November that could have raised $400 million, but it turns out that wasn’t such a consequential decision as the France-based music streaming service have managed to raise in excess of $100 million from existing investors.
The funding was led by Warner Music Group’s parent conglomerate Access Industries and also included input from French network carrier Orange. Deezer’s CEO, Holger Albrecht, says the funding will be used for “operation and execution” of their existing services as well as investing in development and marketing across the 180 countries where Deezer is available.
Albrecht spoke to TechCrunch on the decision to raise money through an alternative process saying: “We had a discussion early in the process, and all the existing shareholders were in support of us raising €100 million. If you don’t get the valuation you want, there are shareholders who want to put in their own money rather than pushing through the IPO. It was open and transparent: ‘What do we need to proceed with our plans and our ambition?’ Was the question we asked ourselves.”
After cancelling their IPO last year due to the condition of the stock market. Deezer said at the time: “It’s better for us to wait a bit. We have money and continue to grow” adding that they were “well funded and well positioned”. That confidence clearly paid off as they’ve now raised $109 million (€100m) with no need for an IPO.
Guillaume d’Hauteville, Vice Chairman of Access Industries, spoke on why they wanted to add more funding to Deezer: “The explosion of music streaming creates a unique opportunity to build a truly personalised service for listeners. Deezer is at the leading edge of this change with a differentiated offering that emphasizes unique localised experiences. We are proud to continue to support the innovative Deezer team.”
Pierre Louette, Chief Executive Officer Delegate at Orange, also weighed in on their part saying: “Consumers everywhere are listening to music on their mobile phones, and this represents a massive opportunity for engagement and increased usage. Capitalising on this shift, Deezer has built a high-quality service, constantly improving it’s user experience with new services: Personalised radio, high-definition audio, lyrics and now the largest music catalogue in the world. (Deezer also today announced they have a catalog of 40 million songs) We’re thrilled to be investing in the music streaming market as we have always been convinced it was a tremendous opportunity to drive innovation on a global basis.”
Deezer CEO Holger Albrecht also commented on the future and potential for expansion, saying: “There are logical partnerships based on the Amazon model so there may be an opportunity for us to work together with companies like Netflix. Short term both of us are capturing momentum in own markets, but there will be movements in this area, with music and video combined. This market is just at the beginning and a lot of scenarios you can see.”