Deezer plans IPO, will spend to grow subscribers

French streaming service Deezer is planning an IPO, and is expected to list on the Euronext stock exchange in Paris “by end of the year.”

"Our contemplated IPO represents a key step in the continued development of our business," CEO Hans-Holger Albrecht said. "It will help us expand our offering through innovative marketing campaigns, drive deeper distribution through our telecom and manufacturer partnerships, and further improve our product and content to deliver an even better service for our listeners."

Deezer is expected to get a valuation of 1 billion euros(Australian $1.5 billion) and is hoping to raise 750 million euros ($1.19 billion) by 2018.

It is also expected that it might finally start to expand in the US market, where it is no more than a niche service. Launched in 2007, Deezer’s catalogue of 35 million music tracks and 40,000 podcasts is available in 182 countries.

As the streaming war heats up to become a primary distributor channel for music, Deezer obviously has to increase its numbers.

It currently has 6.3 million subscribers and 16 million individual users each month. Of the subscribers 75% (4.8 million) have access only because their mobile plans from carriers like Cricket, Orange, Vodafone, and Deutsche Telekom come bundled with Deezer’s premium service. Nevertheless, in the first half of 2015, Deezer made 93.2 million euros ($1.49 billion), compared to 142 million euros ($2.2 billion) for the whole of 2014.

Spotify in comparison has over 20 million subscribers and 75 million active users; although it continues to lose money despite revenues of US$1 billion ($1.4 billion) last year. Deezer also doesn’t have the deeper pockets and artist connections of Apple Music and TIDAL.

Deezer’s last funding round was in 2012, with Len Blavatnik's Access Industries (owner of Warner Music Group) putting in $130 million ($185.8 million).

“Going public is an important milestone for Deezer and the music industry at large”, CEO Albrecht emphasised.