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Shazam acquired by Apple for a reported $400 million

'Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users,' said Apple

12 December 2017, 8:19am
Apple has bought Shazam, a London-based app, which allows smartphone users to identify music for a reported $400 million.

The US company, which revolutionized music with their iPods and iPhones claimed that Shazam was a natural fit for its Apple Music streaming service.

“Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users,” said Apple.

Neither Apple nor Shazam would officially confirm how much the former paid, but a figure of around $400 was reported, much less than the $1 billion the app was last valued at when it tapped investors for money in 2015.

A spokesman for Shazam, which was founded in 1999, said:

“Shazam is one of the highest rated apps in the world and loved by hundreds of millions of users and we can’t imagine a better home for Shazam to enable us to continue innovating and delivering magic for our users.”

This purchase comes as Apple’s biggest since the acquisition of Dr Dre’s headphones Beats Electronics for $3 billion back in 2014.

Shazam is the latest of a string of British tech firms to be acquired by companies overseas since the fall in the value of the British pound following the Brexit vote.

The app creates “acoustic fingerprints” of music and returns song information and interactive links for the smartphone owners to listen to or buy the song. The app has been downloaded more than a billion times and is already used by Siri, allowing users to ask: “What song is playing?”

Though the app is extremely popular, it has struggled to make much profit, with revenues of $54 million in 2016.

Shazam was founded in Hammersmith in West London, by a group of friends who often had trouble identifying the names of songs they heard on the radio. The app began before iTunes and smartphones, so to use the service, people had to call a number, put their phone up next to the radio and then receive a text identifying the song.

One of its co-founders Dhiraj Mukherjee complained that the invention was ahead of its time.

Shazam Founders: Philip Inghelbrecht (left), Avery Wang, Chris Barton, Dhiraj Mukherjee (Photo: Medium)
Shazam Founders: Philip Inghelbrecht (left), Avery Wang, Chris Barton, Dhiraj Mukherjee (Photo: Medium)
“People even now say ‘Oh, it’s a great idea.’ In the end, that was not necessarily an advantage [for me]. Being ahead of the market has consequences as well.”

Mukherjee, who has since left the company, said he couldn’t cope with working at a start up.

“I used to work 16-18 hour says and I would honestly not have had the stamina over 15 or 16 years [to stay with Shazam]. I have a wife and three kids and they test my stamina in different ways.

When you’ve been an entrepreneur, you seek opportunity in a situation, whereas if you’re not, you see obstacles or risk or challenges. The rule of thumb is: don’t go bankrupt, live to fight one more day.”

Of the original team: Mukherjee, Chris Barton, Avery Wang and Philip Inghelbrecht, only Wang remains. It took the company 14 years to begin seeing profits, largely due to advertising revenues. 

DealToday
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