Len Blavatnik buys stake in music streaming service, which has been profitable since 2010 and is in a partnership with Facebook
Warner Music-owner Len Blavatnik has invested $130m (£81m) in subscription streaming service Deezer.
Blavatnik’s Access Industries, which also holds stakes in Top Up TV anddigital sports company Perform, has taken an undisclosed stake in Deezer.
Deezer, which has its roots in France and counts mobile phone giant Orange as a shareholder, would only say that the deal makes Access Industries a “cornerstone investor”.
Axel Dauchez, chief executive of Deezer, said Access was an important investor but did not hold a majority stake.
“We are separate from Warner Music. Access has a minority stake in our company. I disclose this to other major record labels and explained why we are keeping 100% independence. There is no industrial link between us and Warner Music.
Blavatnik described Deezer as a “state-of-the-art music service with enormous potential”.
The company, which expanded to the UK last year, says that it has been profitable since 2010, thanks in part to a partnership with Facebook.
Dauchez said the company embarked on a global expansion last year and has reached 2 million subscribers.
“We’re very pleased to receive this endorsement from an investor of Access’s stature,” he said. “They are knowledgeable and active in the media space and their entrepreneurial spirit is very close to who we are”.
Deezer said its model to date has been to focus on growth in markets outside the United States – by far the world’s biggest music market with intense competition among digital rivals – where it is costly to grow a customer base.
Blavatnik’s Warner Music has strength in the US market, indicating that Deezer’s deal is likely to pave the way to attempting to break into North America.
“Both the recovery and the future growth of the music business require companies like Deezer to develop profitable, long-term business models that deliver for all industry players,” said Dauchez.