Molotov is looking for a buyer

The start-up will soon have exhausted the money it has raised. Several French telecom operators, including Orange, are currently studying the acquisition.

The moment of truth is approaching for Molotov. The start-up is currently looking for new shareholders and hopes to succeed in the fall.

Initially, Molotov had explained want to raise up to 50 million euros from investment funds, but has obviously not succeeded. The start-up founded by Jean-David Blanc (who owns 39.93% of the capital) then expanded its research to industrialists in the sector. According to Edition, talks were held with the trio TF1, M6 and France Télévisions, but failed. According to industry sources, the file is currently being studied by several French telecom operators, including Orange. In theory, another potential buyer would be: Canal Pluswhich tried to launch a service similar to Molotov, but in practice the relationship between the two companies is reprehensible (the encrypted channel, in particular, refuses to be marketed by Molotov).

High rating

According to Edition, Molotov asks for an appraisal of almost 100 million euros, a high amount that TF1, M6 and France Télévisions have reduced. However, this valuation roughly corresponds to the last fundraising of 2016.

Molotov had explained had entrusted the search for investors to the American bank Raine. According to the extension letter, a new mandate was subsequently given to Jean-Marie Messier’s investment bank. Coincidentally, J2M has been an old friend of Stéphane Richard’s since he was his boss at Vivendi. The CEO of Orange has entrusted him with various mandates in recent years, such as the sale of Dailymotion or the acquisition of Bouygues Télécom.

Popular but not financially successful

Launched in the summer of 2016, Molotov allows you to watch French channels live or catch up for free (repeat), thanks to agreements that the start-up has managed to make with all these channels. The service has had undeniable success, with 5.5 million regular users, including 2.5 million per month and 500,000 per day. It also offers paid services to record programs or access thematic channels. These paid services are the sole source of income for Molotov. But according to opinion, they only have 6000 to 7000 subscribers. But Molotov has explained that it would take 500,000 to 750,000 paying subscribers to break even. The start-up (with 75 employees) therefore remains loss-making and will soon have used up all 32 million euros raised since its foundation. At the end of 2016, the cumulative losses already amounted to 15 million euros.

Infringement procedure

To make matters worse, other clouds have recently gathered over Molotov. Firstly, the free TV channels have decided to raise the price of their catch-up service considerably, and are therefore asking more money from their distributors: the telecom operators, but also Molotov.

Subsequently, M6 now refuses to offer its channels for free in Molotov and demands that they be included in the paid offers – terms that are refused by the start-up. Since then, Molotov has attacked before the Paris M6 commercial court, which has responded by filing a complaint of “forgery” with the Paris tribunal de grande instance.

Finally, and not least, TF1, M6 and France Télévisions have just joined forces to launch Salto, which will compete in part with Molotov, even if the two services remain different (one will be essentially free, the other will be paying to be).

When asked, Orange declined to comment. For his part, Molotov refuses to give details.

Molotov’s Fundraising

2013
1 million euros from JDH (Jean-David Blanc), Pierre Lescure, Jean-Marc Denoual, Kevin Kuipers

2014
9 million euros from Jean-Marc Denoual, Oleg Tscheltzoff, Idinvest, Orefi (Jacques-Antoine Granjon), Jaïna (Marc Simoncini), Dotcorp (Steve Rosenblum), Parness SA*, Do&co (Haïm Dan Ohayon)

2016
22 million euros from Idinvest, Sky (4 million euros), Chesterfield/Letter One (fund of Russian Mikhail Fridman), TDF

*Luxembourg company whose directors are Benjamin Uzan, Patrick Belaich, Fabrice Harari and Gilbert Khayat, and which is a subsidiary of Heptagon Investments Ltd, based in the British Virgin Islands

Source: BFM Business

Molotov’s shareholding

Founders: 35%

Investment funds (Idinvest…): 35%

Industry (TDF, Sky): 8%

Business angels: 12%

Source: BFM Business

Results of Molotov

sales
2015: 0
2016: €79,856

Net profit
2015: -3.48 million euros
2016: -11.7 million euros

gross money
2015: € 2.46 million
2016: €14.2 million

NB: the results of 2017 have not yet been approved (a suspension has been obtained until the end of 2018)

Source: BFM Business

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