Music streaming platform Deezer has announced that it is going public via a Special Purpose Acquisition Company (SPAC) deal valuing the music streaming platform which faces major competition from the likes of Apple Music and Spotify, at $1.1 billion. The deal will see the streaming platform merge with 12PO, a blank check company that is being led by Iris Knobloch who once worked at Warner Media as an executive.
Back in 2015, Deezer announced an IPO only to rescind its decision and subsequently raise Series E and Series F rounds in 2016 and 2018 respectively. Investors were bothered about Deezer’s ability to be profitable when it mentioned an IPO. The company was recording losses as of that time.
Compared to its rival Spotify which has 180 million paid subscribers and a total of 406 million monthly active users including its free tier, Deezer currently has 9.6 million subscribers, offers 90 million streaming songs plus podcasts and audiobooks, and generated €400 million in revenue last year.
Aside from this, the company was also facing strong competition from other well-grounded music streaming platforms like Spotify, Apple, and Amazon music. The company has, however, kept up in the struggle of measuring up to them and these efforts have shown over the years. As of the second quarter of 2021, Deezer only held 2 percent of the global streaming market. The music service is more popular abroad than it is in the US – it holds 17 percent and 29 percent of the streaming market share in Brazil and France respectively.
Speaking in a statement, Deezer’s CEO Jeronimo Folgueira said that “Today marks an important milestone in Deezer’s history as we embark on a journey to become a publicly-traded company on Euronext Paris. We are uniquely positioned in the growing music streaming industry, with a very competitive product, a clear strategy, and an experienced and renewed management team to seize this opportunity and create substantial shareholder value.”
Per Wall Street Journal (WSJ), Deezer isn’t profitable yet thanks to the deal it may become profitable by 2025.