“Apple’s [US$400 million] acquisition of Shazam is without a doubt big news for Europe’s striving startup scene. What’s less clear is whether it’s good news or bad news,” Chris O’Brien writes for VentureBeat. “Founded in 2004, in the pre-iPhone era, Shazam represents a remarkable tale of endurance. But just three years ago, the company was reportedly on track for a $1.2 billion IPO as its music-recognition app passed the 100 million download mark.”
“That sale price has many seeing ominous signs for the stable of unicorns stuck with ungainly valuations above $1 billion. In a statement via email, Mark Tluszcz, CEO at Mangrove Capital Partners and chair of Wix.com, warned that the low sale price of Shazam should serve as a warning that a big correction is coming, following a period of venture capital excess,” O’Brien writes. “Naturally, Nenad Marovac, founder and CEO of DN Capital, disagrees. One of Shazam’s earliest investors, Marovac believes Shazam represents a big win for the startup ecosystems in Europe and the U.K.”
“Fundamentally, Shazam never quite found a business model that clicked,” O’Brien writes. “Once upon a time, every entrepreneur believed that if they just got enough eyeballs, the ad dollars would follow. But today we know that Facebook and Google have a near stranglehold on the digital ad market, on desktop and mobile… With ad dollars scarce, and IPO markets remaining weak, it’s going to be harder and harder for advertising-dependent startups to remain independent. Rather then trying to escape the gravitational pull of tech giants like Apple, agreeing to be folded into their massive arms may be the best remaining option for these poor unicorns.”
Read more in the full article here.
MacDailyNews Take: $400 million, while couch cushion money for Apple, isn’t anything to sneeze at, either.
Now, Apple can take Shazam to the next level, with always-on song recognition, HomePod integration, and future AR products and services (AirPods with song recognition, smart glasses with all manner of visual recognition, etcetera).
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