Rumor has it that Spotify and Soundcloud look to partner up in a dramatic way. The streaming company is apparently in talks to purchase SoundCloud, if the Financial Times are to be believed.
This business venture gives Spotify a larger library of content, thanks to the around 125 million songs on SoundCloud right now. Not only that, they also get to remove a competitor from the streaming music landscape. It’s a sly move since SoundCloud launched its own paid service earlier this year. But besides that, there doesn’t seem to be any other benefits for Spotify’s end.
Soundcloud’s Bottom Line
For SoundCloud, the deal becomes a lot more beneficial. The Berlin-based company’s on-demand service SoundCloud Go has all the signs of turning into a flop, after all. With Spotify headed for an IPO, likely sometime in 2017, rumors say, this supposed acquisition could turn out very well for SoundCloud and its investors. To further explain how deep the rammifications would be, one of Soundcloud’s investors is Twitter, which dumped $70 million into the company back in June.
Should the deal be true, a purchase price around SoundCloud’s USD 700 million valuation wouldn’t make much of a dent in Spotify’s wallets. The company itself is valued at USD 8.5 billion. At the moment, Spotify has yet to say a word on this monumental deal.