LONDON (Reuters) - French music streaming service Deezer said on Wednesday it had raised 100 million euros ($109 million) from shareholders such as French telecoms group Orange and Access Industries, the holding of tycoon Len Blavatnik.
Deezer, which competes against Sweden’s Spotify and Apple Music, shelved plans in October for a initial public offering that could have enabled it to raise 300 million euros.
Although growing rapidly, streaming services are as yet unprofitable, as they have high costs for licensing music and face challenges persuading people to upgrade from free versions. They have also been criticized by artists such as pop star Taylor Swift for not paying them enough.
Profitability depends on wrangling better terms for music licenses, which now account for 80 percent of its costs.
Deezer’s other shareholders include the three music labels, Warner Music, Sony Music and Universal Music, part of Vivendi.
Present in 180 countries but with the bulk of its clients in France, some 4.8 million of Deezer’s paying customers get access because the service is bundled with their mobile service from telecom operators such as Orange, Vodafone and Deutsche Telekom
The company has 6.3 million subscribers who can listen to a catalogue of 35 million songs for 9.99 euros a month.
Rival Spotify has 15 million paying customers and raised about $500 million from investors in June, valuing it at $8.5 billion, according to media reports.
Reporting by Jean-Michel Belot, Writing by Astrid Wendlandt; Editing by Mark Potter
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