Music discovery firm Shazam has taken in a new round of financing, scooping up $30 million of investment — in a deal which values the business at more than $1 billion, it said yesterday.
The investors in the round are not being disclosed but at least some are new to the business, and Chairman Andrew Fischer told Bloomberg that “a couple of billionaires” participated in its latest financing. Shazam‘s prior investors include DN Capital and KPCB.
The London-based company has branched out from music discovery in recent years, and now self describes as a media engagement business — expanding into TV show and ad tagging as it seeks to grow beyond its audio recognition roots.
Flush with new financing, expanding its partnerships program is certainly on the cards for Shazam. “Recently we have announced a number of partnerships which have helped us expand into retail, radio and cinema in North America. Part of the new funding will help us provide more of these opportunities as we continue to make it easier for Shazam users to engage with content and brands,” Fisher told TechCrunch.
The growth of online music streaming services which erode traditional music sales (where Shazam makes a cut), and rivals pushing into the audio discovery space — such as Facebook launching its own audio recognition offering last May — lend more urgency to Shazam’s business expansion efforts.
It evidently wants to be the digital layer that precedes and enables all sorts of retail activity, not just music purchases — lining its business up against the likes of Amazon, which set out similar point-and-purchase ambitions via its Fire Phone’s Firefly feature last year. Startups are also sensing value in the space, with the likes of Peekster launching a ‘Shazam for print media’ last year. The ubiquity of smartphones and the rise of m-commerce are the driving factors all these businesses are aiming to capitalize on.
Shazam said the new funding will support “continued evolution and rapid growth” following a year in which it noted clocking up “user milestones, increased service capabilities and expansion into new market sectors”. It now reports some 100 million monthly active users of its mobile apps — so around a seventh the size of mobile messaging giant WhatsApp (700M MAUs), and almost double the size of Spotify (60M MAUs).
Asked whether Shazam plans to use some of its financing to speed expansion by making acquisitions, Fischer said: “We now have a very strong balance sheet and have the capacity for acquisitions if we believe they will add significant value to the Shazam Community.”
The business was founded back in 2002 and originally enabled music discovery on 2G mobile phones by making a call to listen to the audio and then texting the name of the track back — charging for the service. But with the rise of smartphones and apps Shazam dropped that charging model, switching to monetizing via affiliate music sales.
It added a music streaming offering within its apps, starting in 2012. And was integrated into Apple’s Siri in iOS 8 last year. It has also expanded its capabilities to be able to identify other types of content — such as print ads, QR codes, packaged goods and barcodes — opening the business to monetizing multiple types of retail activity.
The new funding will be funneled towards furthering those expansion efforts — or to “increase the universe of what is Shazamable”, as CEO Rich Riley put it in a statement.
“Our move into multiple new environments in 2014 has allowed our users to connect to more aspects of their world while enabling our partners and advertisers to reach our massive and engaged user base like never before,” he added.