London-based start-up Shazam revealed today that it has no plans to list in the UK or the US for at least a year or two.
The music identification service boasts 400 million users worldwide and has been tipped to become one of Tech City’s first major initial public offerings (IPO), but Shazam executive chairman Andrew Fisher told Techworld that a public listing is “still some way off”.
Shazam appointed former Yahoo vice-president Rich Riley as its chief executive in May in order to prepare for the next stage of growth and an IPO. At the time, Riley said that he wanted to drive the firm's annual revenues into the “hundreds of millions of dollars”, in order to justify a $1 billion-plus flotation as early as next year.
"We are not contemplating an IPO in the forseeable future," said Fisher. "When we think about any sort of big financial event, like a flotation, we want to be as ubiquitous as we can be."
In order to boost user numbers and revenues, Shazam is in the midst of diversifying its services so that the mobile app can be used to identify other pieces of media such as TV shows, movies and adverts.
Shazam claims these new services will persuade users to engage with content and brands in ways that they haven't before. For example, when the app recognises a TV advert for a particular product, it can bring up more information or content on that particular item that might encourage the user to go out and buy it.
"Any rationale as to why we would go into the public domain through an IPO process must be justified for business reasons. It’s not necessarily about creating a liquidity event for shareholders. It’s actually about the benefits of being a public company.”
If the time does come for Shazam to list, then the company will keep an open mind about where it decides to do so, according to Fisher.
“We are head-officed and incorporated in the UK. That’s where the majority of our employees are," he said. "However, America’s our biggest market. So we’re open-minded about whether it would be North America or Europe.”
Fisher, who was the CEO of the company from 2005 to May 2013, said there are pros and cons to listing in the UK. “I think some people would argue companies get better valuations in North America,” he said. “But you can also see plenty of examples in the UK where investors have backed digital stocks over recent months.”
The UK government and the London Stock Exchange have introduced a number of incentives over the past couple of years that are designed to encourage UK companies to list on London’s stock markets and keep them in the UK.
For example, TechMarketView chairman Richard Holway argued that the High Growth Segment has been unsuccessful so far. “If it had [been successful] we would be seeing some IPOs by now and those like Shazam and Sophos wouldn't be thinking NASDAQ,” he said.
In reference to London flotations, former deputy chief executive of the Tech City Investment Organisation (TCIO), Benjamin Southworth, was quoted by CityAM earlier this month saying: “We’re still probably 18 to 24 months away. We did hope that King would float in the UK, but that didn’t go our way.”