Deezer raises €100m to take on Spotify, Apple

Three months after abandoning its IPO, Paris-based global music streaming service Deezer has raised €100 million (A$157.5 million) in funding. The round was lead by Access Industries (whose founder Len Blavatnik also owns Warner Music Group) and French telecom company Orange which is also a Deezer partner.

After nine years in operation, Deezer is already available in over 180 countries with 6 million subscribers and 16 million monthly active users. In comparison, Spotify has 20 million paid subscribers and 75 million MAU. Apple has 10 million subscribers and has no free tier.

The new capital raised is less than the €300 million Deezer targeted for its IPO. But the company explained that the financing will be used to build its customer database around the world, hasten the introduction of new products, features and growth initiatives.

“We’re in the early stages of the music streaming market and it’s quickly becoming the primary distribution channel for music,” said Deezer CEO Hans-Holger Albrecht, who joined the company a year ago and believes you won’t last in the streaming competition if you’re too small.

“The additional funding will allow Deezer to consolidate our position as a leading global, independent audio streaming service and expand our offering to music lovers around the world.”

In addition to driving growth to take on rivals as Spotify and Apple Music, Deezer has expanded its catalogue to over 40 million songs, now the largest music catalogue available globally.

In recent months, Deezer doubled its talk offering to over 40,000 radio shows, audiobooks and podcasts across several markets, introduced premium sports and live football content, re-designed its iOS and Android apps and expanded its automotive offerings. It also established and expanded partnerships with BMW, BandPage, Sonos, Three and others.

The investment from Access Industries and Orange provides a surge of credibility that Deezer is heading down the right path.

Access Industries’ Vice Chairman Guillaume d’Hauteville explained, “The explosion of music streaming creates a unique opportunity to build a truly personalized service for listeners. Deezer is at the leading edge of this change with a differentiated offering that emphasizes unique localized experiences. We are proud to continue to support the innovative Deezer team.”

Added Orange’s CEO Delegate Pierre Louette, “Consumers everywhere are listening to music on their mobile phones, and this represents a massive opportunity for engagement and increased usage. Capitalizing on this shift, Deezer has built a high-quality service, constantly improving its user experience with new services: personalized radio, high-definition audio, lyrics and now the largest music catalogue in the world.

“We’re thrilled to be investing in the music streaming market as we have always been convinced it was a tremendous opportunity to drive innovation on a global basis.”

Albrecht says that the arrival of Apple Music has not affected its numbers. In fact, he says, Deezer has had strong growth in France, Germany and the United Kingdom.

Deezer’s upcoming expansion is not aimed at the United States. Its gameplan there is to hook up with mobile telecom partners which offer music streaming data plans and become part of these.