The French musical nugget Believe will enter the Paris Stock Exchange with a valuation of around 2 billion euros, becoming one of the few French companies from the tech and internet world to experience such a consecration. Founded in 2005, Believe provides artists and music labels with the technical and marketing means to establish themselves and exist in the world of streaming – Spotify, Deezer, Apple Music, but also social networks – which has revolutionized the global consumption of music. recorded in recent years.
French tech has seen very few IPOs with valuations of this level: Criteo (advertising targeting) on the New York Stock Exchange in 2013 ($ 1.7 billion), or, on the Paris Stock Exchange, the Worldline electronic payments group (2014, 2.16 billion euros) or the software publisher Dassault Systèmes (1996, 6 billion francs). And in general, France has few companies from the internet world to have achieved such a valuation, whether they are listed or not.
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Present in 50 countries, making more than 80% of its turnover abroad, Believe is aimed at the stranger who wants their song to be accessible via streaming platforms (9.99 euros per year for a song) than to the artist whose notoriety has started to climb or to the star who needs personalized services to better produce and distribute his audio or video content.
“Streaming will represent more than 80% of the recorded music market by 2027,” said Believe founder and president Denis Ladegaillerie, presenting the operation to journalists. The musical “majors”, heirs to the giants of the recording industry, for their part “lost 4% of market share in 2020”, he added.
100 million euros in acquisitions per year
The first listing of the Believe share is scheduled for June 10. With this IPO, the company intends to raise from 280 million to 309 million euros in new money to finance its growth, and in particular to make acquisitions. “We want to finance 100 million euros of acquisitions per year,” explained Denis Ladegaillerie, who will retain around 12-13% of the company’s capital after the transaction.
Believe wants to buy in particular “independent labels which are completely digital” or “more traditional labels which want to accelerate their growth in the digital market”, he indicated.
The amount of funds raised is lower than the target of 500 million euros initially stated by Believe. But with the IPO, Believe is already financing its external growth program until 2023, and leaves itself “more opportunities” to raise new funds then, said Xavier Dumont, the group’s CEO. And “the options” for new financing “will be much more interesting” within 2 or 3 years, assured Denis Ladegaillerie.
Accelerated growth and diversified shareholders
Believe has experienced accelerated growth in recent years, with an average annual growth of 36% between 2018 and 2020, where its turnover reached 441 million euros. And the company forecasts annual organic growth, at constant exchange rates, between 22% and 25% by 2025. At the end of the IPO, the free float should represent around 15% to 18%. of capital.
The American fund TCV (already present in tech stars like Facebook, Netflix, Spotify, Airbnb …) will be the largest shareholder at the end of the operation, with around 41% of the capital. The French fund Ventech will hold around 17%, followed by the French fund XAnge (6% to 7%).
As a sign of its exit from the world of startups and risk capital, Believe will also welcome among its shareholders, up to around 3%, the Strategic Participation Fund, which brings together the insurance subsidiaries of the BNP Paribas, Crédit Agricole and Société groups. Générale, Natixis, Crédit Mutuel, as well as Groupama and CNP Assurances.
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