News May 11, 2021

French digital company Believe announces IPO plans to raise €500 million

French digital company Believe announces IPO plans to raise €500 million

French digital company has confirmed it plans an on the Paris stock exchange to raise €500 million (AUD$771.3 million) to fund expansion and acquisitions.

Founded in 2005, it is hoping for a valuation of €2 billion ($3 billion) according to published reports, and based on high valuation of tech companies.

In its media release, it described itself as “fast-growing and profitable”.

It revealed it generated €728 million ($1.12 billion) in digital revenues in 2020, and €441 million ($680.3 million) of consolidated revenues in the same year.

This was up 12% from 2019, but the Financial Times went on to note that Believe had a 65% drop from what it achieved from 2018 to 2019 because of the pandemic.

It also had a net loss of €26.3 million ($40.5 million) last year due to heavy investment in technology and staff, after having achieved a €4.6 million ($7 million) profit in 2019.

“In the last decade, streaming has changed how people discover music, paving the way for the rise of independent artists and labels,” Denis Ladegaillerie, founder and CEO of Believe, said.

“Believe is ideally positioned at the core of this transformation with a unique model to provide solutions best adapted to meet the evolving needs of each independent artist and label, at all levels of development, in the digital world.

“Believe has the technological platform, the global reach and the people on the ground to be at the forefront of this new cycle.”

The IPO, he added, “would enable us to accelerate our development and continue to pursue our profitable growth trajectory while achieving our mission to help build a better, more diverse, more respectful, more transparent and fairer future for all artists”.

Post-IPO it plans to spend €100 million ($154. 2 million) a year on deals from 2022 to 2025 compared with €126 million ($194. 3 million) since 2018.

Believe’s flexible deals and service-oriented contracts – putting it in the same playing field as AWAL, Ditto and Downtown – have seen being embraced in Australia, where it set up an office in 2019.

In March when struck up an alliance with the company, manager and guitarist Josh Smith told TMN “at this stage of our career it was the best move”.

“I saw the success that Cub Sport had with Believe in Australia, and how well many of their other campaigns have gone, realised that for bands like Northlane it was probably going to be the best option for us because we’ve got such a loyal dedicated fanbase and one which is growing.”

Aussies on the roster have included Allday, Parcels, Woodes, Tora and Nerve, and labels as Double Drummer, City Pop and HopeStreet.

As of 31 December 2020, Believe’s footprint was in over 50 countries with 1,270 employees and working with 850,000 artists (directly or through their labels), representing 100 billion+ Spotify streams and 375 billion YouTube views in 2020.

Last year, 18% of its revenue was made in France, 22% in Germany, 28% in the rest of Europe, 14% in the Americas and 18% in Asia, Oceania and Africa.

Its digital music brands include TuneCore (which pays indie artists over $506.9 million every 12 months, according to company figures), Believe Distribution Services, Nuclear Blast, Naïve, Groove Attack and AllPoints.

Investment banks working on the IPO include Citigroup, JPMorgan, Société Générale, BNP Paribas, Goldman Sachs, HSBC, UBS and Rothschild.

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