Spotify Rival Deezer Just Raised $109 Million. But Is That Enough?

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Spotify rival Deezer has just announced a $109 million funding round, just a few months after it postponed an initial public offering.

According to reports, funds will be used to redouble efforts to partner with telecom operators to offer bundled access to Deezer.  That is part of an ongoing effort to blend charges into monthly cellphone contracts, in addition to signing up subscribers directly.  The round comes from existing investors — including Access Industries and Orange, the former French telecom monopoly and mobile giant.

The investment group is betting big on Deezer’s strategy to bring music streaming to a global audience, particularly in developing countries.

That’s an innovative attack that initially avoids the mega-expansive US market, though the Paris-based streaming music service still counts Spotify and Apple Music among its main rivals.  That means a difficult war ahead: Deezer currently has about 6 million paying subscribers in 180 countries, compared with more than 20 million paying subscribers for Spotify and roughly 10 million for Apple Music.

With Spotify and Apple Music growing aggressively and continuing to raise their numbers of paying subscribers, the competition is expected increase in the coming months.  Also, Pandora Media has its sights on international growth to increase revenue and paying subscribers, with a ‘full stack music’ strategy that now includes on-demand.  Just last year, Pandora acquired the assets of Rdio to increase its value to customers in the streaming market.

Adding to the extreme competition is the extreme amount of money these rivals have.  Just this week, Hans-Holger Albrecht, Deezer’s chief executive, admitted that it would be difficult to compete head-on with its big rivals, which have access to larger financial resources.  “It’s not easy to keep up with competitors,” Albrecht said. “But this won’t be a winner-takes-it-all market.  If you can work with telecom operators, then the economics aren’t as tough as the likes of Spotify.”