14 DAY TRIAL // Despite things looking up for online music streaming services, it is still a cut-throat segment with a lot of businesses going under and the ones that do survive hardly making any money. There's been one music service that has been making a lot of waves lately, Spotify, but even it isn't making nearly the kind of money it needs. Deezer, a French startup offering a similar service for quite a while longer than Spotify, has just raised €6.5 million from AGF Private Equity and CM- CIC Capital Privé in a second round of funding.
“We are delighted to welcome the assistance of AGF Private Equity and CM- CIC Capital Privé in the Deezer adventure. Their experience in the Media and Internet sectors is decisive in the continuation of our business. This equity validates our position and strategy. We are henceforth prepared to continue with our development using state-of-the-art models in all European countries,” Deezer cofounders Jonathan Benassaya and Daniel Marhely said.
The second round raises the total amount of funding to €12.2 million for the French music service and the money is destined to spur further growth in the face of increased competition mainly from Spotify. The new investors join the DOTCORP funds, which are the historic investors in Deezer. As part of the deal, Guillaume Lautour, partner of AGF Private Equity, will join Deezer's board of directors.
Deezer started out as BlogMusik but the first venture ran into trouble thanks to the dubious legality of a free music streaming service it launched at some point. The company managed to secure the proper licensing eventually in 2007 and has now become one of the most popular services in Europe with over 10 million users, six million of which are from France. It also provides a mobile app that it claims has been downloaded more than one million times. There are rumors that the service will start offering a premium option for €9.99 per month, the same price as Spotify's paid service.