By Sarah Young
LONDON, July 7 (Reuters) – Smartphone app developer Shazam
has found an unlikely ally in the form of Carlos Slim, one of
the world’s richest men, who is investing $40 million to back
the development of the start-up best known for helping music
fans identify catchy songs.
The move is surprising for 73-year-old Slim, who built his
company America Movil in a more staid sector,
namely the highly regulated telecommunications and TV business
in Latin America.
Before Shazam, Slim’s only forays into Europe were to plough
4.8 billion euros ($6.1 billion) into stakes in Dutch operator
KPN and Telekom Austria, on which he is
nursing huge paper losses after their shares declined sharply in
the past year.
Slim, ranked the world’s top billionaire by Forbes magazine
with a net worth of $73 billion, was brought in by one of
Shazam’s venture capital owners, Silicon Valley fund Kleiner
Perkins Caufield & Byers.
British-based Shazam will use the funds to accelerate its
expansion into television, where its recognition software can
tune into an advertisement’s soundtrack then link viewers
directly to the brand’s website.
It wants to establish the offer in Britain and the rest of
Western Europe and Latin America.
“Within 18 months we expect TV will significantly outperform
the music side (of the business) and that’s part of this
investment,” Andrew Fisher, executive chairman of Shazam, said
in an interview.
HUGE OPPORTUNITY
Blue-chip brands such as Unilever, Procter & Gamble
and American Express are among the companies who
have already used Shazam in advertising campaigns in North
America, where the company generates tens of millions of dollars
in revenue from the TV side, Fisher said.
Given that global TV advertising spending totaled $350
billion in 2012, according to researchers Nielsen, the scale of
the opportunity for Shazam is huge, said Fisher, who hopes the
TV business will help build the company into one suitable for a
stock-market listing.
“That’s our ambition, to list … Certainly, two years’ time
is realistic,” he said. The company’s products are already used
by 350 million people.
America Movil has also agreed to promote Shazam across the
dozen or so markets it operates in Latin America. “Shazam is
defining a new category of media engagement that combines the
power of mobile with traditional broadcast media and
advertising,” Slim said in a statement.
Slim’s investment takes the total backing that Shazam has
secured since 2009 to $72 million.
The billionaire businessman’s empire of phone, construction
and banking companies often expands by buying stakes in small
companies. Earlier this year, Ora.TV, a fledgling online digital
television network funded by America Movil, bought TV production
company Stick Figure Productions.
Separately, Slim’s Grupo Financiero Inbursa,
which runs an investment fund managing about 5.15 billion pesos
($394.1 million), has invested in companies from film financier
Movie Risk to natural gas company Gas Natural Mexico.
