Apple could announce the agreement to buy London-based Shazam as soon as Monday, according to the report. TechCrunch cited an anonymous source as saying the deal is worth around $400 million — far less than the valuation of more than $1 billion Shazam announced in 2015, after its most recent round of funding.
Apple declined to comment. Reps for Shazam did not respond to requests for comment.
Apple would obviously want to use Shazam to bolster its music business — and drive sales and subscriptions from users who “Shazam” songs. The two companies have had a longstanding business relationship, under which Shazam app users can click through to purchase songs on iTunes that they’ve identified. Shazam’s features are also integrated with Apple’s Siri voice assistant.
Privately held Shazam was founded in 1999, and initially worked by using mobile phones’ SMS text-messaging features to ID a song. In 2008, Shazam was among the first apps in Apple’s then-brand-new App Store.
Shazam’s app now lets users identify and share audio, TV shows, printed material (such as magazine ads and movie posters) and augmented-reality content. In addition to its deal with Apple, Shazam lets users stream songs ID’d in its app through Spotify, Deezer, Google Play Music and YouTube. The company says its app has been downloaded over 1 billion times by users in over 190 countries, and that its users “Shazam” content more than 20 million times per day.
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 has raised more than $140 million to date.
Shazam has been operating at a loss as it has continued invest in its app. For 2016, the company reported sales of £40.3 million ($54 million) and a net loss of £4 million ($5.4 million), according to financial filings in the U.K. That’s compared with 2015 revenue of £35.2 million ($47 million) and a net loss of £16.6 million ($22 million).