Israeli music company MUGO Inc. has been acquired by streaming giant Deezer as part of its investment deal with the Mexican company, Grupo Salinas. The Mexican company's investment in the streaming service will be $40 million, bringing its total valuation to $1.4 billion — a major leap in value for Deezer. Following the investment, Deezer will acquire the assets of the Israeli company that will become part of Deezer.
Founded by Ori Segal, Roman Slutsky, and Shay Goldberg, the company has developed a patented Live Share technology that allows some listeners to sync to the same point in the song even when listening from a different source. In addition, the MUGO app lets you track users with similar musical tastes, share playlists, play music sorted by mood, and more.
Today, a television program called MUGO Live, which makes use of the Israeli app, is aired in Mexico. Following the acquisition, the program will change its name to Deezer Live. Talking to Calcalist, Ori Segal spoke about the process the company went through until now. “In 2017, we won Calcalist's mobile app competition. We won despite thinking that we didn’t have a chance opposite the other companies that participated. Following the surprising win, we were able to raise a million dollars from private investors and went to the Barcelona Mobile Show, which was part of the prize. We had a tremendous flow to our stall and many people even took pictures with us," Segal said.
"One of the people who came to us was the founder of Chinese company Baidu who at first we suspected was spying after us. After that, we met with an Israeli guy who worked with Deezer and already made an initial relationship because our app worked with Deezer. After him, we were approached by the right-hand man of Ricardo Salinas, the owner of Grupo Salinas, the largest business group in Mexico," Segal recalled.
“After the competition, I went with him to Mexico, they became our strategic investors and we conquered the Mexican market. Then the MUGO Live TV show was born. The show was broadcast on Mexico’s primary television station. At one point I thought it made sense to connect between Salinas with Deezer, since we were part of Deezer’s premium service, and as a result of that connection, the two companies joined forces, Salinas invested in Deezer as part of a large-scale effort to bring Deezer's app to Latin and South America. We were part of that deal in which Deezer acquired all of MUGO's assets,” Segal said.
“It's a great deal for us who always strived to turn listening to music into a social event. Now it's really happening. Prior to the sale, we raised $3.5 million and another $5 million for marketing. It's a very good deal for all the parties,” Segal said.
Mexico's streaming market is expected to double, and reach $700 million between 2019 and 2024. Deezer already has a growing user base in Latin American countries, including Mexico, Colombia, and Argentina. Deezer is also Brazil's second-largest streaming service. The partnership with Grupo Salinas’ companies will enable Deezer to become a key audio streaming player in Mexico and accelerate its growth in the region.
“We are pleased to form this alliance with a world-class company like Deezer. This will be one of the most innovative and disruptive partnerships in the market. It is an exciting time to be proactive and to participate in the fast-growing music streaming industry while we connect music fans in Mexico,” said Moshe Arel, Director of Innovation of Grupo Salinas.