American technology behemoth Apple on Monday confirmed the acquisition of popular music-recognition app company Shazam Entertainment Ltd. for $400 million.
Though the announcement was on expected terms, as we were hearing rumours of Apple planning to buy Shazam for quite a sometime, the terms of deals were little sketchy back then. Now that it's out in the open, many are surprised over such a low $400 million valuation for an 18-year-old company and has more than a billion downloads on mobile devices with more hundred millions of active users at any given time across the world.
Shazam investors' Mexican billionaire Carlos Slim and venture capital firms Kleiner Perkins Caufield & Byers, Institutional Venture Partners and DN Capital Ltd will be disappointed and they should be, as the company was valued $1 billion when it closed last investment funding meet in 2015.
This move is said to be Apple's strategy to improve user-experience of its burgeoning Apple Music service, as the customers will be able to discover new songs more easily and make the purchase.
Shazam, which originally started out in the US, is currently headquartered in London, UK. Now, with the acquisition, senior-level employees will be heading to Apple's new campus in Cupertino.
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"We are thrilled that Shazam and its talented team will be joining Apple. Since the launch of the App Store, Shazam has consistently ranked as one of the most popular apps for iOS. Today, it's used by hundreds of millions of people around the world, across multiple platforms. Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users. We have exciting plans in store, and we look forward to combining with Shazam upon approval of today's agreement," Apple said in statement.
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