Deezer, a French music-streaming platform, is seeking capital from investors that could result in a valuation of around $1.1 billion, Bloomberg reports. Sources familiar with the matter, who disclosed the information to Bloomberg, asked not to be identified because “the process is still at an early stage and the valuation target may change.”
This investment would allow Deezer to compete more aggressively with Swedish music-streaming giant Spotify, which is supposedly valued at $8.5 billion. Currently, Deezer has 16 million active users a month around the world, including 6 million paying subscribers, which puts it behind Spotify. The behemoth service has 75 million active users, of which 20 million are paying subscribers. (As a point of comparison, Apple Music’s free trial currently has about 11 million subscribers.)
Deezer, one of Fast Company‘s most innovative companies in music this year, launched in 2007 but only made incursions in the U.S. a year ago. Prior to that, it was focused on expanding in Europe and Africa. With this new funding, it could potentially strengthen its presence in the American market.
Deezer’s strategy for encouraging users to pay for subscriptions is to provide highly curated and specialized music experiences in different territories; it also partners with other companies to create bundled subscription packages. In several markets, for example, it collaborated with phone companies to offer subscriptions along with mobile-phone service. In the U.S., it partnered with Sonos and Bose to present high-quality music streaming to audiophiles who are unsatisfied with the quality of sound on other services.
“We’re not really competing with other people in the subscription space,” Deezer U.S. CEO Tyler Goldman told Fast Company earlier this year. “We’re competing with free. Most people don’t pay for music these days because the value of the service isn’t high enough.”