French streaming service, Deezer, announced a bold new step today that it plans to go public by the end of the year. The company said Tuesday that it is planning an IPO on the Paris stock exchange, once it receives approval from French financial authorities.
Analysts have floating a possible valuation in the range of €1 billion ($1.12 billion) for Deezer, but Chief Executive Hans-Holger Albrecht has been mum on how much money or what type of valuation the streaming service is seeking according to the Wall Street Journal.
In a statement Albrecht outlined the company's plans for what they plan on doing with the extra infusion of cash from the IPO.
"Our contemplated IPO represents a key step in the continued development of our business," CEO Hans-Holger Albrecht says in a statement via Billboard. "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 claims 6 million subscribers and says it is available in over 180 countries. The company's revenue grew 41 percent in the first half of 2015 to €93 million, but the firm remained square in the red losing €9 million during that period.
The move comes as a way to challenge music streaming rivals like Spotify, Apple Music and Rdio. Spotify says it has 20 million paying subscribers with revenue of $1.22 billion during 2014, but their losses also increased to $185 million. Valuations have been floated in the $9 billion ballpark.
The IPO will give observers a much clearer look at the finances of a streaming company. There are always pressures from outside investors to turn a profit, but going public will open up the company and its chief executives to a new level of scrutiny from shareholders who may not be satisfied with loses for the sake of scale. Deezer will have to scale up quickly and start making money or this gamble could end badly.
