The French streaming app Deezer makes a rather difficult entry on the Paris Stock Exchange, this Tuesday, July 5. The unicorn, founded in 2007, had already tried to enter the stock market in 2015. An attempt aborted due to poor market conditions.
A fledgling introduction to Deezer
While Deezer finally goes public, its action was immediately abused. Only a few hours after the opening of the course at 8.50 euros, its action fell by 35% to reach 5.52 euros before stabilizing at 6 euros.
It was I2PO, a SPAC, a listed “special purpose acquisition company” with the aim of being acquired or merged, which made this admission possible. It was founded by the Pinault family, by French businessman Matthieu Pigasse and Iris Knobloch, the former head of WarnerMedia, to facilitate the listing of Deezer. It raised 143 million euros during a fundraiser. The French music streaming company will also merge with I2PO, now renamed Deezer.
In a statement, Jeronimo Folgueira, CEO of Deezer, said, ” Deezer’s IPO on Euronext Paris is an important milestone in the company’s history. We are now embarking on an exciting new chapter to expand, grow and capture an even larger share of a booming music streaming market. By merging with I2PO and going public, we have laid a solid foundation to execute our strategic plan, with the right capital, expertise and network. “.
Iris Knobloch has left her place as head of I2PO to Jeronimo Folgueira and becomes the vice-president of the Deezer Board of Directors. She has declared that ” we launched I2PO, the first European SPAC dedicated to entertainment and leisure, with the ambition to take a European champion to new heights. With Deezer, we have found the ideal combination, as its new management team has positioned it extremely well to capture a significant share of the growing music streaming market, thanks to its well-established brand, exceptional technological capabilities and platform. scalable “.
The Minister of Economy, Finance and Industrial and Digital Sovereignty, Bruno Le Maire, was present when Deezer went public. He hailed the cultural success of the French company.
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 competitive market
Deezer is not the only music streaming application to enter the Paris Stock Exchange. Its direct competitor, Spotify has also made its introduction on the Parisian stock market. According to MIDiA, in the second quarter of 2021, Spotify represented 31% of the global market share with 406 million users, where Deezer held 2%. Very popular in France and Brazil, Deezer has nearly 9.6 million subscribers and was the most used service in France in 2019.
With a price rising to 6 euros at the close of the Paris Stock Exchange and a share falling by 35%, the French unicorn is losing money. Deezer’s financial health is also in jeopardy. The company posted a loss of 120 million euros for a turnover of 400 million euros in 2021. The shareholders hope to take advantage of the rapid growth of the streaming market to bail out the coffers and “ achieve operational profitability by 2025.