Make It Rain: SoundCloud Gets $70 Million From Twitter
Earlier this year SoundCloud joined the Stream Wars with SoundCloud Go, an ad-free subscription-based service that functions like most music streaming services, while still catering to the users that not only use the site to find new music but to promote their own.
Now, the company has received some financial help from social networking service Twitter. According to a report from Recode, Twitter has invested around $70 million in the audio sharing service. "Earlier this year we made an investment in SoundCloud through Twitter Ventures to help support some of our efforts with creators," Twitter CEO Jack Dorsey explained. "They've been great partners of ours over the years and their community-supported approach mirrors ours in many ways."
A spokesperson for SoundCloud confirmed the investment, saying:
"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."
Neither parties commented on the specifics of the investment, but it wouldn't be surprising if this were part of a strategic partnership. Twitter could use the audio sharing service to increase engagement (SoundCloud attracts 175 million users each month). And SoundCloud could use the social media platform to promote SoundCloud Go (the money is helpful too, considering that the company had nearly doubled its losses from 2013 to 2014). Twitter had originally considered buying SoundCloud two years ago, but ultimately walked out of the deal.
Along with this SoundCloud has been signing licensing deals with record companies such as Universal Music Group and Warner Music Group. As the company attempts to increase its revenue, it'll be interesting to see if these changes help or hinder SoundCloud's desire to be the YouTube for music.