Billionaire Carlos Slim Makes a $40 Million Bet on Shazam

Mobile app company likely another step closer to an IPO

   

Carlos Slim, the world’s second-richest man at a net worth of $67 billion, has agreed to invest $40 million for a 10.8% stake in Shazam, a red-hot music app.

The deal serves as more evidence that the company is likely preparing to come public.

Shazam itself is a pretty cool idea. The app can identify a song or TV show by recording the music or taking a screenshot — and in many cases, doing so also gives the user access to additional information or similar content. Between platforms including Apple’s (AAPL) iOS, Google’s (GOOG) Android, Microsoft’s (MSFT) Windows Phone and the BlackBerry (BBRY) line, the app has racked up 70 million active users monthly.

Slim should help boost that footprint. Slim controls Mexican wireless provider America Movil (AMX), which has about 263 million subscribers, primarily in the Latin American market). As part of the deal, Slim will pre-install the app on new phones sold.

The music space is saturated with players, including Amazon.com (AMZN), Rdio, Slacker, Apple, Google and Pandora (P). Yet Shazam has a unique technology — rather than providing music, it’s instead a Google-like search engine for audio and visual content … meaning it’s not necessarily in direct competition with these players.

Meanwhile, the company’s business has blossomed even without Slim’s help — revenues were $300 million last year and appear to be on track to double in 2013.

All in all, it’s a likely bet that Shazam will eventually pull off a successful IPO.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/billionaire-carlos-slim-makes-a-40-million-bet-on-shazam/.

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