Twitter reportedly invests $70 million in SoundCloud
With the launch of its paid subscription service SoundCloud Go in March, SoundCloud officially entered the highly competitive streaming market. It’s far too early to determine whether the service will be a success or failure, but given the company’s negative earnings report for 2014, Spotify raising $1 billion to compete in the market, Apple Music overhauling its interface, and Amazon reportedly planning to enter the fray later this year, SoundCloud needed a significant influx of capital to carve out its niche in an already crowded marketplace.
The company found a willing partner in Twitter, whose venture capital arm has reportedly invested $70 million in SoundCloud at a $700 million evaluation. The investment comes two years after Twitter’s failed attempt to buy the Berlin-based streaming site. While certainly welcomed by SoundCloud, Twitter, which has been admonished for its slow growth, is also badly in need of significant return on its investment.
In a statement, SoundCloud confirmed the deal with Twitter but was mum on the details.
“We can confirm that Twitter has made an investment in SoundCloud. Both companies facilitate and inspire contemporary culture to happen in real time while reaching millions of people around the world. This investment will enable SoundCloud to remain focused on building value for creators and listeners alike, and to continue the global rollout of many company initiatives such as our recently launched subscription service, SoundCloud Go.”