Google allegedly may acquire SoundCloud
In December of 2016, Spotify decided not to purchase SoundCloud, following months of widely-publicized talks between the two streaming companies. At the time, TechCrunch reported that Spotify “ultimately walked away because it feared that an acquisition could negatively impact its IPO preparation.” The price tag which SoundCloud placed on the buyout was $1 billion – the same value which reportedly dissuaded Twitter from buying the German company in 2014.
Now, Music Business Worldwide reports that a bigger fish is rumored to be considering acquiring SoundCloud: Google. MBW notes a potential correlation between the rumored acquisition and SoundCloud’s 2016 hire of CFO Holly Lim as a measure to “maintain SoundCloud’s financial health and capitalise [sic] on new opportunities for growth.” Lim herself was previously employed as a Business Operations executive at Google.
MBW reports that the price which Google is allegedly considering buying SoundCloud for sits at around $500 million – cutting the streaming company’s previous valuation in half. The outlet goes on to address the impact that Google’s buyout would have on the major labels which have a stake in SoundCloud; Universal, Sony, and Warner Music Group hold roughly 4%, 3%, and 1-2% in the company, respectively. According to MBW, “If SoundCloud was sold for $500m, the majors would therefore get a cut of around $45m between them.”