Seven years after its first attempt, the French platform Deezer entered the Paris Stock Exchange on Tuesday morning, convinced that the conditions are more favorable for players in music streaming, a booming market. But its action has already fallen by 35% to 5.52 euros, against 8.50 euros for its opening price, two hours earlier.
The French competitor of the Swedish group Spotify also entered the Paris Stock Exchange on Tuesday, a few minutes after Jeronimo Folgueira, CEO of Deezer, rang the bell opening the market, alongside the Minister of the Economy Bruno Le Maire. “You have to grow, conquer new markets, like the American market”said the minister. I do not accept seeing all American companies come to Europe, without seeing European companies go to the United States to explain to our American friends that European companies are the best”he added.
The IPO of @DeezerFR is not only an economic and technological success, but it is also a cultural success.
Defending Deezer is defending our culture. It is to defend our artists. It is to defend our memory. It is to defend our musical heritage. pic.twitter.com/RzURWMg04G— Bruno Le Maire (@BrunoLeMaire) July 5, 2022
A few days earlier, Jeronimo Folgueira pointed out to theAFP only for this “second attempt” stock market, “the situation is different from what it was in 2015”. “Music streaming is really established, it accounts for almost two-thirds of recorded music revenue, which was not the case before”he explained. “The state the company is in today is much better than seven years ago. The company has changed, the market has changed: it’s the right time to take this step and become a company listed“, he completed, while acknowledging that the context is “difficult right now” for technology stocks in the financial markets.
To succeed this time, the main shareholders of Deezer, including the Anglo-American billionaire Len Blavatnik who holds 43% of the shares, have chosen a less risky introduction system, via a Spac, an investment vehicle. Spac I2PO, founded by the family of French billionaire François Pinault, French businessman Matthieu Pigasse and former WarnerMedia executive Iris Knobloch, has raised funds on the stock market to facilitate the listing of Deezer and has already raised 143 millions of euros.
Launched in 2007, the French subscription music listening service claims nearly 30% of the market in France, but its 9.6 million subscribers represent only 2% of the global music streaming market, far behind the leader Spotify ( 31% market share), Apple, Amazon and Tencent, according to MIDiA. The strategy of Deezer, which wants to more than double its revenues by 2025, is to bet on music, its universe and its technology, unlike Spotify which is multiplying the launches of podcasts or Amazon which is focusing on audio books.
To take advantage of the rapid growth of the global streaming market (+26.4% users in one year in the second half of 2021), Deezer intends above all to join forces with players already established in several key markets to rely on existing customer bases: operators Orange in France and Tim in Brazil, or the RTL group in Germany. “Our intention is to find partners with whom we can enter new markets, because we have an extremely competitive product and, with the right distribution, we know that we can conquer market share and compete with the big players”details Jeronimo Folgueira.