The subscription service replaces its scrapped IPO with a smaller funding round
Girding for battle against Apple Music and Spotify, Paris-based music subscription service Deezer raised €100 million, or about $109 million, the company announced Wednesday.
Its funding round, led by billionaire Len Blavatnik’s Access Industries and joined by French telecom giant Orange, is a plan B for Deezer, after it abandoned a bid to raise about €300 million in an initial public offering. In October, Deezer blamed market conditions for scrapping that plan.
Deezer’s shifts underscore the difficulty that midsize subscription services face as the emerging streaming music industry forms around a few well-funded players. Swedish start-up Spotify and tech giant Apple have quickly emerged as two leaders in convincing consumers to pay about $10 a month to access a giant catalog of tunes, and both have the advantage of deep pockets.
Spotify, the leader in subscription music with more than 20 million paying members and 75 million total listeners, has raised more than $1 billion.
And although Apple has many more demands on its attention that just music, the gadget maker has more than $200 billion in cash, enough money to buy the entire recording industry several times over. Its Apple Music, launched last year, has at least 6 million paid members and possibly as many as 10 million, according to an FT report last week.
By comparison, Deezer has about 6 million subscribers and has raised about $250 million.
Deezer said it would use the new funding to increase its subscriber rolls and accelerate product development. It also touted its bigger music catalog, which it expanded to more than 40 million songs globally.