Carlos Slim backs app Shazam with $40m investment
The Mexican telecoms tycoon Carlos Slim, one of the world’s richest men, has invested $40m in Shazam, the smartphone app.
América Móvil, the telecoms giant he controls, has taken a stake in the company and will install it on smartphones it sells across Latin America.
Shazam uses audio fingerprinting technology to recognise music and allow users to buy downloads or access offers from television advertisers. The company, based in London, plans a stock market flotation after enjoying a rapid growth in users to more than 350 million and a sharp rise in sales to American advertisers.
Andrew Fisher, Shazam’s chairman, said that as well as providing access to 260 million Latin American mobile subscribers, Mr Slim’s investment would allow the company to expand its sales team in Europe and build capacity in its computer systems.
“The business is already self-financing but this will allow us to accelerate,” he said.
“The reason we’re doing things is so we can go faster. We’ve been focused on North America and now we’re expanding in Europe.”
It is Mr Slim’s first investment in a British company. The 73-year-old was previously the world’s richest man but recently lost the title to Bill Gates after Mexico passed new laws to reduce his dominance of the country’s telecoms sector.
Shazam also hopes to take advantage of Mr Slim’s television interests. Its rapid revenue growth has been based on integrating its technology into programmes and advertising, so viewers can use the app to easily access extra content or special offers. Mr Slim has millions of television subscribers and owns significant production assets, and the rights to broadcast the next two Olympic Games in Latin America.
“The conversation actually began when we approached Mr Slim to get Shazam on his smartphones,” said Mr Fisher. “But it quickly turned into an investment.”
Shazam has similar deals to pre-load its software with 300 mobile operators around the world, but this is the first time it has taken money from a partner. Earlier investors, who have put in $35m, include the Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, which also backed Amazon and Google.
“I think this is a great endorsement for UK and European technology companies,” said Mr Fisher, who recently hired Yahoo! veteran Rich Riley to take over from him as Shazam chief executive as the company heads towards a public offering.
Mr Fisher said he did not expect Shazam to float until late 2014 because it cannot yet make solid sales predictions and that he could not rule out taking further investments before then.
The flotation is expected to raise up to $1bn. Mr Slim’s investment is understood to value the company at around $400m.
According to the most recent accounts available at Companies House, Shazam made a loss of £3m in the year ended June 2012 on revenues of £22m. The previous year it lost £280k on revenues of £16m.