Believe announces the approval of its Registration Document by the French Autorité des marchés financiers (“AMF”) and takes first step towards an IPO

Paris, 10 May 2021 – Believe, one of the world’s leading digital music companies, today announced the approval of its registration document, dated May 7, 2021, by the French securities regulator (Autorité des marchés financiers, “AMF”) under number I.21-018. The approval of Believe’s registration document constitutes the first step of its contemplated IPO on the regulated market of Euronext Paris. The completion of the IPO is subject to the approval of the prospectus relating to the offering by the AMF, as well as favourable market conditions.

Denis Ladegaillerie, Founder and CEO of Believe, said: “In the last decade, streaming has changed how people discover music, paving the way for the rise of independent artists and labels. Believe is ideally positioned at the core of this transformation with a unique model to provide solutions best adapted to meet the evolving needs of each independent artist and label, at all levels of development, in the digital world. Believe has the technological platform, the global reach and the people on the ground to be at the forefront of this new cycle. Believe’s CSR strategy centered around respectful, fair and transparent talent development is at the heart of our ambition to become the best and most valueadded partner for artists and labels in the digital world. This IPO project would enable us to accelerate our development and continue to pursue our profitable growth trajectory while achieving our mission to help build a better, more diverse, more respectful, more transparent and fairer future for all artists.”

Believe, the artist and label development platform for the digital world

Believe’s mission is to develop independent recording artists and labels in the digital world. We accomplish our mission by providing them the solutions they need to grow their audience at each stage of their career and development. Believe’s passionate teams of local digital music experts around the world leverage the Group’s global technology platform to advise them, distribute and promote their music.

Believe differentiates by:

- Building solutions best adapted to artists and labels needs at each stage of their career and development. New artists, established artists, top artists and labels have different needs. Through its portfolio of brands and its global technology platform, Believe provides solutions best adapted to meet their evolving needs, at all levels of development, in all geographies and across a large diversity of music genres. 

- The priority given to the development of artists and labels in their local market. The music industry is primarily made up of artists singing in their own language and shaping local culture with their music. Believe’s focus is on local artists and labels, helping them to develop independently in their home markets.

- Its expertise and digital DNA. Artist and record labels are not developed in the same way in the traditional world and in the digital music world. Believe leverages its proprietary technology platform, all the data it collects, its relationships with local and global digital platforms, and its digital expertise to build the reference platform for the digital development of artists and labels worldwide.

-  Integrating values and CSR at the core of its development. Believe aims to develop artists with respect, fairness and transparency. These values are the foundation of the trust relationships the Group aims to establish with its artists and labels, its partners, its employees and more generally all its stakeholders. Believe strives to integrate these values in all aspects of its business from establishing simple and fair contracts, transparent royalty statements, protecting the data privacy and freedom of expression our artists and labels to promoting gender equality, diversity and inclusion.

Believe’s solutions are available in a large number of segments of the music industry all over the world. Believe provides automated solutions for artists and labels under the TuneCore brand and premium solutions through its Label & Artist Solutions and Artist Services commercial offers, the second one under a large portfolio of brands including AllPoints, Naïve and Nuclear Blast.

As of 31 December 2020, Believe operated in more than 50 countries with 1,270 employees and provided solutions to more than 850,000 artists (directly or through their labels), representing more than 100 billon total streams³ and 375 billion video views⁴ in 2020.

Believe’s ambition is to build the leading artist and label development platform for the digital world leveraging its differentiated business model, technology, music and digital DNA.

A high growth profile supported by strong market dynamics

Believe is benefiting from the robust music industry growth driven by the massive shift to streaming in developed markets and its accelerated adoption in emerging markets, as well as the increase in independent artists and labels looking for digital-first and go-to-market expertise.

Streaming represented 62% of the global recorded music market in 2020⁵ and has benefitted from significant growth in recent years with a 37% compound annual growth rate (CAGR) over the 2015- 2020 period, increasing from $2.8 billion in 2015 to $13.4 billion in 2020⁶ . Streaming is expected to achieve an estimated market size of $18.8 billion by 2023 and $22.4 billion by 2027⁷ , i.e. reaching 78% of the global recorded music market in 2027.

Believe has demonstrated its ability to deliver consistent profitable growth over the past few years, at scale and at a faster rate than the buoyant music industry. Over the 2018-2020 period, Believe’s digital music sales (DMS) increased by over 54%, from €472 million to €728 million, representing a compound annual growth rate (CAGR) of 24% (vs a CAGR of 7.6% for the recorded music market⁸ ). Believe’s revenues recorded a CAGR of 36%, from €238 million in 2018 to €441 million in 2020. In Q1 2021, Believe continued to experience rapid and profitable growth with revenues of €124 million (+ 26% vs Q1 2020), representing an organic growth at current exchange rates⁹ of 23%.

The Group benefitted from a geographically diversified revenue mix, in 2020 18% of its consolidated revenue was generated in France, 22% in Germany, 28% in the rest of Europe, 14% in the Americas and 18% in Asia, Oceania and Africa.

Strategy and Outlook

The Group’s strategy is to build the leading global artist digital development platform, by continuing to invest to broaden its global footprint, pursue its disciplined external growth strategy and enhance and expand existing capabilities through investments in its technological platform. For the financial year ending December 31, 2021, Believe targets an organic revenue growth at current exchange rates¹⁰ of c.20%. The Group aims to achieve an organic revenue growth CAGR at constant exchange rates¹¹ of between 22% and 25% over the 2022-2025 period, driven by market growth and continued market share gains in key local markets.

As part of the contemplated IPO, Believe intends to raise c. €500 million to finance its growth strategy.

Citi, J.P. Morgan and Société Générale are acting as Joint Global Coordinators and Joint Bookrunners and BNP Paribas, Goldman Sachs, HSBC and UBS are acting as Joint Bookrunners in the contemplated IPO. Rothschild & Co. is acting as independent financial adviser to Believe.

⁽¹⁾_{DMS is a non-GAAP indicator used by the Group to track the volume of business generated on digital platforms and social media. DMS corresponds to gross amounts paid to the Group by digital platforms and social media in exchange for the Group delivering audio and video content.}

^{(2)Compound annual growth rate}

^{(3)On Spotify in 2020}

^{(4)On Youtube in 2020}

^{(5, 6, 8)IFPI, Global Music Report 2021.}

^{(7)MiDIA “Global Music Forecasts 2020-2027”.}

^{(9)Organic growth at current exchange rates corresponds to revenue growth at constant scope presented at current exchange rates, i.e., not adjusted for the impact of exchange rate fluctuations. Revenue growth at constant scope corresponds to revenue generated in Q1 2021 by all companies included in the Group's scope of consolidation at 31 March 2020 (excluding any contribution from companies acquired after 31 March 2020), compared to revenue generated in Q1 2020 by the same companies, regardless of when they entered the Group's scope of consolidation.}

^{(10)This revenue forecast is based on the assumption that there will be no major variation in the exchange rates of the main countries outside the Euro zone in which the Group generates its revenues (in particular the euro/dollar exchange rate), compared to those observed during the year ending 31 December 2020.}

^{(11)Organic growth at constant exchange rates is calculated by applying the average exchange rate for the comparative period to the revenue for the period and the comparative period of each Group entity expressed in its reporting currency. Exchange rate fluctuations relating to transactions, if any, carried out by each reporting entity in currencies other than its functional currency (generally referred to as transactional exchange rate fluctuations) are not included.}

Availability of the registration document – Believe’s registration document is available on the company’s website dedicated to its IPO process (investors.believe.com) as well as the AMF’s website (www.amf-france.org). It is also available free of charge upon request from the company at Believe, 24 rue Toulouse Lautrec, 75017 Paris, France. The Group would like to draw the attention of potential investors to Chapter 3: ‘Risk Factors’ in the registration document approved by the AMF.

About Believe

Believe is one of the world’s leading digital music company. Believe’s mission is to develop independent artists and labels in the digital world. We accomplish our mission by providing them the solutions they need to grow their audience at each stage of their career and development. Believe’s passionate team of digital music experts around the world leverages the Group’s global technology platform to advise artists and labels, distribute and promote their music. Our 1,270 employees in more than 50 countries aim to support independent artists and labels with a unique digital expertise, respect, fairness and transparency. Believe offers its various solutions through a portfolio of brands including TuneCore, Believe Distribution Services, Nuclear Blast, Naïve, Groove Attack and AllPoints.