Deezer raises funds to expand as streaming heats up

Streaming service Deezer said Wednesday it has raised 100 million euros led by the parent of music giant Warner to expand in the increasingly competitive sector.

The announcement came after the French company in October abruptly put off plans for an initial public offering in which it had sought to generate three times as much money.

Deezer said that it had instead secured 100 million euros ($109 million) led by Access Industries, the US conglomerate headed by Russian-born billionaire Len Blavatnik that owns Warner Music Group, one of the three major music label groups.

Deezer received a similar injection of financing from Access Industries in 2012 ahead of the streaming company's international expansion.

Also participating in the latest round of funding was French telecom leader Orange S.A., which said in a statement that music streaming on mobile telephones represented a "massive opportunity" for growth.

Deezer said it planned to use the funding to introduce new products and features.

"We're in the early stages of the music streaming market and it's quickly becoming the primary distribution channel for music," Deezer chief executive officer Hans-Holger Albrecht said in a statement.

"The additional funding will allow Deezer to consolidate our position as a leading global, independent audio streaming service and expand our offering to music lovers around the world," he said.

Deezer had initially sought to go public in hopes of raising both more money and visibility as it challenges the dominance of Sweden's Spotify, but it blamed market conditions for the about-face.

Deezer says it has more than six million subscribers. Spotify, also a private company, says it has 75 million users of whom 20 million pay for advertisement-free access.

While well-known in Europe, Deezer has a limited presence in the United States where it has focused on the niche market of high-end audio.

Deezer in its announcement said it had more than 40 million songs in what it described as the largest streaming catalog.

Spotify and Apple Music both advertise that they have more than 30 million songs while Tidal, an upstart led by rap mogul Jay Z, says its catalog has more than 35 million tracks.

Deezer has also tried to appeal to motorists, notably through a collaboration with BMW.

Streaming, which allows unlimited online access to music, has rapidly grown in recent years but has also become more competitive with last year's entrance of Apple Music and relaunch of Tidal.