At its last funding round in 2015, Shazam was valued at $1.02 billion, per Pitchbook. (It did not make Apple's list of most popular apps for 2017.) The app also allows users to connect to iTunes to buy the tracks that were "Shazamed", as well as to streaming services such as Spotify and Google Play.
In the tech and music worlds, speculation has proliferated on the possible motives for Apple to buy the company, especially as the technology behind the app's song-identification is reportedly easy to replicate nowadays. Sources say the companies will announce the acquisition on Monday, December 11.
Founded back in 1999, Shazam has made a name for itself as one of the most prominent music recognition services in the world, with its flagship app boasting more than 1 billion downloads back in October of 2016.More news: Eating cheese every day may actually be good for you
Investors in Shazam include Kleiner Perkins Caufield Byers, Institutional Venture Partners, DN Capital, Acacia Capital Partners, and Mexican billionaire Carlos Slim's America Movil, along with Universal Music Group, Sony Music Entertainment and Len Blavatnik's Access Industries (parent of Warner Music Group). The company saw a major turnaround in 2016 with revenues at $54 million dollars and became profitable for the first time with a pre-tax loss of $5.3 million. Artists on Shazam lets you follow famous people and see what music they are Shazamming.
It also integrates with other apps like Snapchat and Apple's Siri, and it now sends lots of traffic to other music apps like Spotify and Apple Music, which pays it when those clicks convert to purchases. Whether this perceived lack of profitability explains the lower price Shazam has reportedly been sold for is unclear, but it's certain that Apple has scored a bargain here.