Tech: Apple is buying Shazam for $400 million (AAPL)

Apple is buying music recognition app Shazam for a fraction of its most recent valuation.

• Apple is reportedly buying Shazam, a music recognition app.
• Apple is said to be paying $400 million for the company, which was last valued at $1 billion.

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Apple is buying music recognition app Shazam, a move that could allow it to integrate an important feature into its line of smartphones at a time when the iPhone's innovation crown is under threat from Google and Samsung.

The deal is expected to be signed this week, according to a TechCrunch report citing anonymous sources. Apple is paying $400 million for Shazam, according to one source in the report. Recode, citing anonymous sources, is also reporting a price tag of $400 million.

That's the right price range, an investor with knowledge of the deal told Business Insider.

That price is lower than Shazam's most recent post-money valuation of $1.02 billion, according to Pitchbook. However, that valuation is "a bit artificial," the investor said. Later investors recieved a liquidation preference and will get their invested money back first before other shareholders, including employee options.

The Shazam app allows users to identify the music that's playing nearby, such as a song in a restaurant or cafe. The app quickly became one of the most popular smartphone apps when it launched in 2009.

Google recently incorporated similar technology into its high-end Pixel 2 smartphone.

Shazam, which was founded in 1999, made $50 million in revenue last year, according to a person familiar with the company.

Shazam CEO Rich Riley previously told Business Insider that the company would make sense insider a larger company looking for a foothold in music or advertising.

Representatives for Apple and Shazam did not immediately respond to a request for comment.

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