Deezer to begin German expansion using Brazil, France model - CEO

Deezer SA

05/08/2022 11:00

By Steven Grattan
    SAO PAULO, Aug 5 (Reuters) - French music-streaming platform
Deezer SA  DEEZR.PA  will begin its German operation in the
coming weeks as the newly public listed company pushes its
market expansion plans with a focus on securing local
partnerships, CEO Jeronimo Folgueira told Reuters in an
interview on Thursday.
     Folgueira, who became CEO a year ago, said the company
wants to replicate its Brazil strategy in other countries, but
for now it will only focus on a handful. Brazil is Deezer's No.
2 market.
    "I think in Brazil we were able to replicate the model that
we successfully done in France, which is we enter the market
with big strategic partners - like TIM  TIMS3.SA , Globo and
Mercado Libre  MELI.O  here - who really help us get scale," he
said.
    Germany is the next country on the company's list, with a
local partnership with RTL Group  AUDK.LU . 
    "We are launching Deezer inside of the RTL+ app, and that's
happening in the next few weeks. It will give us very strong
entry into the German market," Folgueira said.  
    "We expect Germany to become the growth driver of the
company for the next few years on the back of that. We are
looking to replicate that successful French and Brazilian
model." 
    In July, Deezer - one of France's first so-called "unicorns"
- took the leap on a long-awaited initial public offering (IPO),
which analysts saw as a bold move given the current global
economic situation.  urn:newsml:reuters.com:*:nL8N2YM1G1
    The company shares fell by as much as 59% in the days
following the flotation, before paring some of those losses.
    "The fact that we were able to IPO and raise 143 million
euros in the current situation ... shows the strength of our
business and industry," Folgueira said. 
    Founded in 2007, just a year after rival Spotify  SPOT.N ,
Deezer had contemplated entering the stock market for years. It
postponed previous IPO plans in 2015 due to market conditions.
    Folgueira said the IPO was needed to raise capital to
execute Deezer's expansion plans and that the company was stable
enough to do so, adding it also wanted to create liquidity for
some of its investors and open room for "potential M&A down the
road." 
    The CEO said they will eventually consider expansion into
other markets, like the U.S and U.K., where the company has
little presence.
    "For us to really grow big we have to find a way of entering
and cracking those markets. If we can steal market share and
compete with Spotify, Apple  AAPL.O , Amazon  AMZN.O  in France
and in Brazil, there's no reason we cannot do that anywhere else
in the world."
    Deezer had 9.6 million subscribers at the end of 2021, still
well below Spotify's 180 million premium subscribers at the
time.

 (Reporting by Steven Grattan; Additional reporting by Gabriel
Araujo; Editing by Christopher Cushing)
 ((Steven.Grattan@thomsonreuters.com;))