Trebel, a free music streaming app that targets listeners “who will not – or cannot – pay for music subscriptions,” has officially filed to go public.
Connecticut-headquartered Trebel, which launched in late 2018, following a 2014 incorporation, shed light upon its operations and its IPO plans in an offering circular. The company intends to make up to 25 million units available to investors, according to this document, with each $1 unit consisting of a Class B share as well as a warrant to purchase another half of a Class B share.
Furthermore, Trebel emphasizes in the filing that it will put the IPO’s generated capital towards pursuing an ambitious expansion as opposed to seeking short-term revenue – a business model that appears similar to Spotify’s, given that profitability has long eluded the Stockholm-based entity. “We frequently make decisions that may reduce our short-term revenue or profitability if we believe that the decisions benefit the aggregate user experience,” the text states.
Moreover, Trebel says that it will work to add “millions” of new songs in the coming years – besides “exploring other forms of content, such as podcasts, music news summaries, cartoons, audio books, and ebooks.”
And in terms of monetization, Trebel indicates that the lion’s share of its current revenue derives from ad-supported listening, which generated nearly $263 million (€216 million) for Spotify through 2021’s initial three months.
Unlike Spotify, however, Trebel will also look to draw earnings from in-app purchases and “brand takeovers and branded experiences.” The latter encompass “monetizing user engagement by driving actions for brands, such as completing surveys and installing apps.”
On the earnings and usership front, the document notes that Trebel had an accumulated deficit of $12.2 million as of 2019’s end, with the year’s revenue having totaled $1.88 million (against $960,000 in 2018). 2020 brought with it $2.33 million in earnings for Trebel – $1.19 million of which covered owed royalties, the filing shows – and 3.2 million MAUs as of December 31st. Moreover, each daily user spent an average of 14.9 minutes “of online time in the app.”
The “online” component of the stat bears highlighting because Trebel discloses several times in the document that it “has an important advantage that no other music service, including YouTube, offers – the ability for listeners to listen to their music offline, without an internet connection, and at no cost.”
Finally, the filing communicates that Trebel has licensing deals with the Big Three labels – which “have the right to audit us for compliance” with these deals’ terms – and indie players like “Ingrooves, Cinq Music Group, Symphonic Distribution, Empire Distribution, TANGO Multimedia, DashGo, and Colonize Media.”
Besides the obvious threats to the company’s operations – stiff streaming-service competition, the possibility that licensing terms could change materially, etc. – Trebel is embroiled in a lawsuit with Verizon. In a complaint last June, the cellphone-service provider said that it had overpaid Trebel by “approximately $232,000 due to a data entry error” – though the streaming service “denies that the payment was in error.”
In other IPO news, Believe today debuted on the Euronext Paris. However, shares parted with almost 13 percent of their value, finishing at $19.54 (€16.05) apiece.