America Movil Invests $40 Million in Music App ShazamAmy Thomson and Adam Ewing
Shazam Entertainment Ltd., the U.K. maker of the song-identification application for mobile devices, has been tagged by the world’s second-richest man.
Billionaire Carlos Slim’s America Movil SAB has invested $40 million in the London-based company behind the software with more than 70 million active users every month. The deal includes an agreement to pre-install Shazam on mobile phones sold in Latin America, Chairman Andrew Fisher said in an interview.
Shazam’s technology uses algorithms to decipher unique elements in snippets of music to help pinpoint the name of the tune. The company has expanded into tags for ads and television shows, with more than 1 million customers using Shazam during the closing ceremony of the London Olympics last year. Shazam wants to use the partnership to cash in on excitement around the Brazilian Olympics in 2016 and soccer’s World Cup next year.
“Ultimately it’s about people not having to type www. to go to a website,” Fisher said. The deal is about “enhancing the service to give people more reasons to use Shazam as part of their everyday life, not just music.”
The deal gives Slim a 10.8 percent stake in the company, Mexico City-based America Movil said in a statement.
Shazam’s audio-matching app for smartphones and tablets can identify almost any song playing on the radio. The company has more than 350 million users globally and said it adds more than 2 million users each week. Its annual sales of digital goods has surpassed $300 million and is expected to double annually, the company said.
Preloading the app on phones in Latin America will increase Shazam’s customer base, Fisher said. Stage two will be working with other companies that Slim controls to take advantage of his ties to broadcasters and advertisers.
Shazam’s investors also include Kleiner Perkins Caufield & Byers, Institutional Venture Partners and DN Capital Ltd, according to its website. While the company ultimately wants to sell shares to the public, an initial public offering won’t happen this year, Fisher said.
“We are certainly on a path toward an IPO, but not in 2013,” he said. “It’s a plan for the future. Right now, we’re seeing great benefit in staying a private company.”