Tech giant Apple has confirmed that it has acquired popular music-discovery service app Shazam. Both parties have been tight-lipped about the cost of acquisition, but a report in Techcrunch last week claimed that Apple has agreed to pay $400 million for this acquisition. If this is indeed true, then it means that Apple is paying significantly less than Shazam’s market valuation of more than $1 billion during its last fundraising.
The U.K based Shazam Entertainment Ltd was incorporated in 1999 by four promising British entrepreneurs. After a brief struggle during the initial years, the company finally found its footprint in the market after its music discovery app debuted on the iPhone in 2008. This app instantly identified any music and songs playing nearby and quickly offered an Itunes link to users to buy them (in case if they are available). This app over the years became a massive success and notched up more than 100 million monthly active users by August 2014.
Cashing on app’s tremendous success, Shazam raked up huge funds from various VCs over the course of two decades. According to a rough estimate, the British entertainment firm raised whopping $143 million through various fundraising rounds.
Meanwhile, it is still not clear how will Apple try to capitalize on this latest acquisition. Most likely, it may integrate the Shazam app into Apple Music in a bid to improve the user experience. The tech giant has given a strong hint about the same in the official statement, where it has explicitly mentioned that Apple Music and Shazam are a ‘natural fit’ for each other. Apple may also try to capitalize on Shazam’s augmented reality technology.
Shazam’s acquisition also appears to be the latest move in Apple’s effort to build its own indigenous media content library. It recently acquired comedian James Corden’s popular Carpool Karaoke TV series and also launched a new reality show called Planet of the Apps on Apple Music.
