Deezer postpones A$467.5m IPO

Paris-based music streaming service Deezer withdrewits IPO (initial public offering) today, citing the market’s struggling conditions.

As previously reported by TMN, Deezer was set to sell up to 8.2 million new shares when it listed on the Paris stock exchange on October 30. It had set a price tag for domestic and international investors of between AU$56.72 and AU76.73, with the official price to be announced yesterday.

The IPO was expected to raise AU$467.5 million and was set to give the 35-million track service a value of between AU$1.4 billion and AU$1.7 billion. Its main competitor Spotify is valued at more than AU$10.9 billion and has raised over a billion dollars from private investors. It also claims 75 million users, of which 20 million subscribe to its paid-for product.

Deezer gets over 50% of its revenue from its local French territory. About 4.8 million French subscribers get Deezer as part of a mobile phone bundle with French telcom Orange, which also has an 11% stake in Deezer. Altogether, 40 telcos sell Deezer subscriptions around the world. Of course, these kinds of bundle deals don’t drive revenue in the same way full subscriptions do.

According to NY Times, Deezer has said it was reviewing its funding options.

The company’s short statement noted: “Deezer is well funded and well positioned as it continues to pursue its growth strategy.”

The news follows a fragile earnings report from Pandora, which reported a loss of almost US$86 million. The internet radio giant will maintain its place in the game however, it has 80 million active monthly users and its subscription cost is $4.99, versus the market-wide $9.99.

Apple Inc. released its fourth fiscal quarter report overnight noting it’s been a record setting financial year for the tech giant. It reported US$51.5 million revenue and a net profit of US$11.1 billion however its CEO Tim Cook didn’t reveal anything new about Apple Music. In the earnings call Cook repeated past reportsthat Apple Music has over 15 million individual and family accounts and over 6.5 million paying customers

Deezer, which was founded in 2007, has around 6.3 million subscribers in 180 countries (down from 6.9 million last December) and 16 million users a month. To date, it’s raised overAU$210million in private backing but the IPO was expected to fend off its rivals like Spotify and Apple as it tapped into global public markets.

TMN has reached out for Deezer for comment.