Shazam valued over $1b after investment round

Shazam's latest $30 million investment round has left the music identification company with a valuation of more than $1 billion, priming it for a potential public offering.

It may come as a surprise to some Shazam users that the company has just been valued at over $1 billion following its latest investment round, but the company's executive chairman believes that the new $30 million cash injection reflects the value of the niche it has carved out for itself.

"This funding reflects the substantial progress we have made in delivering a new paradigm for brands and content owners to increase engagement with their audiences whilst magically connecting people to the world around them," said Shazam executive chairman Andrew Fisher.

The capital-raising effort was backed by a collection of as-yet-unnamed investors, but included at least "a couple of billionaires", Fisher told Bloomberg Television.

Previously, the UK-headquartered company attracted interest from Mexican business magnate Carlos Slim, ranked as the richest person in the world from 2010-13, who invested $40 million in Shazam in 2013.

With his investment, Carlos joined a host of existing high-profile Shazam backers, including Kleiner Perkins Caufield & Byers, Institutional Venture Partners, DN Capital, and Acacia Capital Partners.

Even as a startup, Shazam attracted investors' interest thanks to its unique offering and its potential to be monetised, with the company's music search and identification platform now integrating a number of additional sales and marketing facilities, which draw revenue from partnership deals.

After his investment, Slim wrangled a deal with the company that saw its smartphone app preloaded onto mobile phones sold in Latin America. Likewise, in April last year, reports emerged that Apple was planning to integrate Shazam's system into iOS 8. Apple's assistant Siri now draws upon Shazam's capabilities to name tunes.

The platform was initially released in 2002, when users would dial number "2580" into their non-smartphones, hold the phone up to the music they wanted identified, and wait for Shazam to send an SMS message with the song details.

Now, Shazam claims that its platform is used by more than 100 million monthly active mobile users, and that its mobile app has been downloaded half a billion times. It also has eight offices in three countries, and has a staff of more than 150 people.

The company also has a surprising number of revenue channels, including music sales, with claims that around 10 percent of global music sales originate from the app -- according to a BBC report -- along with mobile advertising, and partnership deals that employ its technology for promotional and marketing purposes.

Shazam technology is now integrated into television shows and commercials, movie theatres, retail environments, radio content, and out-of-home advertising.

The company has announced new capabilities to its platform using smartphone cameras for print ads, QR codes, packaged goods, and barcodes, along with capabilities to recognise wireless beacons.

With this latest fundraising effort, the company plans to take its technology, integration, and offering further, in a bid to strengthen its bottom line, increase its revenue, and eventually list publicly.

"We are delighted to welcome our new investors as we further strengthen our balance sheet and continue to effectively execute on our corporate strategy," said Fisher. "Strengthening the balance sheet gives us more choices about when we would go to the public market."

Shazam chief executive office Rich Riley said that the company wants to move beyond the environments it currently operates in, and push the boundaries of what is "Shazamable".

"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," said Riley.

"We're excited to continue to focus on user growth and engagement, building on our strength in music and innovating to increase the universe of what is Shazamable in order to realise the enormous potential of Shazam," he said.

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