French news publication Le Figaro has recently reported that the music streaming service named Deezer has received approximately $130 million from Access Industries. The large injection of funds comes from the firm that also owns Warner Music Group. The Next Web confirmed the news, with the website receiving an invitation from Deezer for a press conference in London, United Kingdom. The event is to be held on October 10 and Deezer has stated that it will announce “A major new funding investment.” No other details were given about who is behind the investment.
Deezer is a French startup that launched in 2006 under the moniker Blogmusik . Over the course of a few years the site changed its name and has been experiencing fast growth, with a recent announcement mentioning 200 countries where Deezer is scheduled to launch. This list does not include the United States, which is a very large market for music. Instead it seems that the music streaming site is focusing on population heavy Asia.
Le Figaro sates in its report that Deezer will use 25 percent of the new funds to buy back shares so that the company has more control over its decisions. Furthermore, the money will be spent on a new product interface and “increasing investment in global scope, local editorial and music discovery.” The invitation to the press conference also clarifies that the media will get to know more about Deezer’s performance in 2012 while also being given a glimpse of “Deezer’s vision for revolutionising music worldwide.”
Up until now, Deezer has received $19.3 million in funding from venture capitalists in two separate rounds. The Series B round took place in 2009 with $12.5 million successfully raised at the time. This sum will be dwarfed by the new investment total. Current known investors are IDInvest Partners, CM-CIC Capital Prive, Xavier Niel and Dotcorp Asset Management.
Deezer may be setting up to break out in a big way as the streaming music industry matures and goes though progression. For example, the wildly popular Spotify has maintained its strong growth but has not been able to figure out how to consistently make money because of the large amounts it pays in royalties. Another player in the market, Rdio, is rumored to be in acquisition talks Microsoft. With so many ups and downs it is difficult to say whether Deezer will in fact find a business model that will make it money while satisfying consumers.
Source: The Next Web
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