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Deezer launches IPO on Paris stock exchange, could raise over €300 million

By | Published on Thursday 15 October 2015


The Deezer geezers expect to raise about €300 million by selling new shares in the company, it was confirmed this morning.

As previously reported, the streaming music firm confirmed last month that its next round of fundraising would be an initial public offering on the Euronext Paris stock exchange, and this morning more information was made available about the 30 Oct flotation.

While the much anticipated Spotify flotation – if and when it happens – will be in no small part about allowing existing investors to cash in, this IPO is more about raising a big pile of cash to allow Deezer to compete with its better funded rivals, in particular Spotify and Apple Music. Or in the words of CEO Hans-Holger Albrecht this morning: “The IPO will allow us to accelerate our growth and continue to play a leading role”.

Among the facts that have come out in the last month as a result of declarations around the IPO are that the service currently has 6.3 million paying subscribers, though only 1.5 million are direct subscribers, another 1.5 million are “active users” accessing the service via a tel co bundle, while the remaining 3.3 million are “inactive users” who have access to the service via their tel co package but haven’t streamed anything in at least the last month, if ever.

All of which are pretty modest figures, compared to Spotify at least, and especially given Deezer was bragging about having five million paying subscribers all the way back in 2013. Though a change in its relationship with key tel co partner and early investor, Orange in France, means the firm has been focusing on shifting customers from bundles to direct subscriptions in the last year.

Elsewhere, IPO documentation confirmed that Warner Music owner Access Industries currently controls 27% of the company, while that early investor Orange now has an 11% stake and the three major record companies between them own nearly 15% of the business as a result of the equity elements of their licensing deals with the service.

The company has set a target share price for the IPO of between €36.40 and €49.24, with a plan to sell between 6.092 million and 8.242 million shares, though with an option to increase that number by 15%. According to Reuters, analysts have put a potential stock market valuation on the streaming music firm of about €1 billion.