August 4, 2021

Believe hopes for a fanfare rating

Thursday, June 10 in the morning, the CEO of Believe, Denis Ladegaillerie, is expected in the premises of Euronext for the essential “ceremony of the bell” which will formalize the IPO of his group, valued at nearly 2 billion d ‘euros. A consecration for this musical distributor who supports 850,000 artists, including Jul, PNL and Naps, and independent labels (Tôt ou Tard, Six et Sept, Groove Attack, AllPoints, Naïve, Nuclear Blast…) in order to impose them on the platforms – worldwide streaming forms and social networks.

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Denis Ladegaillerie had disdained several offers to buy back his start-up – today very ridiculous – from music majors, being convinced that it was safer to wait. Well it took him, if we see the stratospheric valuations of the music sector, such as that of Warner Music Group when it returned to the New York Stock Exchange just a year ago (12.7 billion euros) or that Universal Music (35 billion euros) before its next listing in Amsterdam, scheduled for September.

Believe is riding the explosion of music streaming – which “Will represent 80% of the recorded music market by 2027”, according to its CEO. The company created in 2005 intends to raise between 280 million and 309 million euros to finance its growth. Less, therefore, than initially planned (500 million euros). “We prefer to secure our acquisitions until 2023, even if it means refinancing ourselves later on more advantageous conditions”, explains Mr. Ladegaillerie. It also allows shareholders to limit the dilution of their stake.

“Understanding algorithms”

This contribution of new money will essentially allow “To invest 100 million euros per year”, explains the CEO, who wants to buy either “Independent labels”, whose digital transformation it will accelerate, either “Labels already managed by Generation Z managers, who benefit from rapid growth thanks to their digital development”, or technological activities intended to complete its range of services. After having already bought eighteen companies in six years, including TuneCore, its American competitor, the CEO of Believe is targeting around thirty potential targets and has started exclusive negotiations with seven of them.

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The group’s businesses have developed considerably, to give more visibility, and therefore more listening and income, to artists, whether they are known or not. Far from the partnerships concluded with televisions or radios, it is, in the digital world, “To understand how to expose artists to the widest possible audience. However, 70% of listening on Spotify and 75% on YouTube are generated by algorithms. You have to understand how it works, it’s one of the keys to development in order to maximize audiences. On condition, always, that the artist is good ”, assures Mr. Ladegaillerie.

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