Deezer announced on Monday April 18 its wish to launch on the Paris Stock Exchange. Petit Poucet among the major streaming platforms, the French company would like to attract a wider international audience. To do this, it needs funds and a new lever for growth.
An operation supported by a SPAC
This is not the first time Deezer has sought a listing. In 2015, everything was ready for an IPO, aborted at the last minute. The French company had then mentioned ” market conditions that could harm his proper development.
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This new attempt by Deezer would be done through I2PO, a SPAC (Special Purpose Acquisition Company). This is a company created with the aim of buying a company after going public and raising funds. These companies generally have a well-defined sector when they were created. Born in 2021, I2PO was pushed by Iris Knobloch, former president of WarnedMedia, Artémis – holding company of the Pinault family – and Matthieu Pigasse. In July, it raised 275 million euros to invest in the entertainment and leisure sector.
” The combination with I2PO will accelerate the growth of Deezer, whose ambition is to achieve a turnover of one billion euros by 2025 ” illuminates a press release.
Deezer should be able to count on 425 million euros of capital injected during its introduction. 120 million would come from a PIPE subscribed by certain current and new shareholders such as Orange, Bpifrance, Universal Music, Sony, Xavier Niel… To this will be added the funds of I2PO. Listed under the name of Deezer, its valuation would reach 1.05 billion euros.
For now Deezer holds 2% of the global market and is losing money
If Iris Knobloch assures that ” It’s not about racing Spotify », the position of Deezer, whether financial or on the market, must evolve. According to MIDiA, in the second quarter of 2021, the French streaming platform relied on a tiny part of the international market (2%). Leader Spotify holds almost a third (31%), Apple Music follows with 15%, followed by Amazon Music and Tencent Music with 13% each. Nevertheless, Deezer stands out in France with 29% market share, as well as in Brazil with 17%. In total, it can count on 9.6 million subscribers.
Breakdown of the global music streaming market in the 2nd quarter of 2021. Source: MIDiA.
On the financial side, Deezer ended 2021 in the red, with a loss of 120 million euros for a turnover of 400 million euros. A defect that the shareholders and I2PO intend to correct, which has the will ” achieve operational profitability in 2025.
To achieve this, Deezer intends not only to continue its conquest of international users, but also ” offer a very different offer from that of its competitors says Jeronimo Folgueira, its general manager.