When describing the popularity of his company’s music discovery app, Andrew Fisher points to the use of its name as a verb.

Shazam’s executive chairman says the word is already well on its way to being so ubiquitous that, like Google, the company can become a global behemoth that is also a permanent addition to the English language. “The opportunity is to become a multibillion-dollar company,” Fisher said.

The company has raised $30 million (Dh110.19 million) in a new funding round, with investors gaining just under 3 per cent of equity, valuing the company at more than $1 billion.

Shazam has not disclosed who is behind its latest investment, but said the backers were a mix of institutional investors and high net-worth individuals based in the US and Europe. In past rounds, Shazam raised $95 million from investors including Carlos Slim’s America Movil and Kleiner Perkins Caufield & Byers, the US venture capital fund.

Fisher said that the company had not been “actively fund-raising”, but that “we had a number of investors approach us. We took a view that with the world economy so uncertain at the current time, the prudent thing to do would be to strengthen our balance sheet and gain new investment.”

Previously, Fisher had said the company was aiming for an initial public offering that would value it at “$1 billion and beyond”, but first needed to increase sales to “hundreds of millions”.

He said Shazam “isn’t ready to be on the public markets”. Instead, it plans to use its new funding to prove the durability of its business model.

Mobile users use Shazam to identify unfamiliar songs by opening the app, holding their smartphone or tablet to the radio or television to “listen” to it and then allowing the technology to identify the song within seconds.

The company was founded in London in 2002, but chief executive Rich Riley, a former Wall Street analyst and Yahoo executive, leads the group from New York. The app has been downloaded more than 500 million times. Shazam says it has more than 100 million monthly active mobile users, with 30 per cent of them based in North America.

Yet despite this popularity, the company has yet to turn a profit. According to filings to UK Companies House, in the financial year ending June 2013, Shazam’s revenues had risen 42 per cent to about 31 million pounds compared with the previous year, with losses narrowing to 1.98 million pounds from 3.33 million pounds in 2012.

The app makes money by taking a small commission from the sale of digital music, largely through Apple’s iTunes online store, when users buy a track after finding it through Shazam. It also has licensing agreements with music streaming services and device makers.

But the company is branching out. The company has also begun to develop display advertising within its app.

Its technology can identify television shows, movies and onscreen ads. It says that 85 per cent of ads shown on North American TV are Shazam-enabled. After “Shazaming” an ad, it will enable viewers to access exclusive online features, such as music videos.

Shazam is developing new image-recognition functions, that would allow people to use the app to identify pictures by pointing a phone’s camera at a page in a magazine.

Paul Verna, an analyst with eMarketer, a research firm, said these new revenue streams were important, as the digital music market was too small for the company to reap the revenues required to achieve its ambitious goals. But, he added, it remained unclear whether Shazam’s advertising efforts justified its new valuation.

“I’m not saying any of these things are non-starters,” he said. “I just think the jury is out ... They’re doing a lot of things right. But in terms of what the next step is that is unclear.”

Shazam is also facing increasing competition. SoundHound, a US-based company whose mobile app has been downloaded more than 230 million times, says it is the only audio recognition app capable of identifying a song when a user sings or hums the tune.

But Fisher remains bullish and is confident that it will go public when the time is right. “We will still be lossmaking through 2015 as we accelerate our investment and we’re very comfortable with that,” he said.

“At the right time, we would consider going to the public markets. We have a strong belief, guided by what institutional investors tell us, that we will be a very successful public company.”

— Financial Times