SoundCloud: 11 facts about Spotify’s German target

Sweden’s music streaming service Spotify is rumoured to be in talks to buy German rival Soundcloud, a deal which could be worth $700m (€620m).

In a bid to stay ahead of rivals from across the Atlantic, namely Apple and Amazon, Spotify is looking to expand its assets before an Initial Public Offering.

Signs of Spotify wanting to make acquisitions were apparent earlier this year when it announced it had raised $1 billion. Using equity is another option for Spotify if it can persuade SoundCloud about the value of its own stock.

What do we know about Germany’s music sharing platform? Here are some fast facts:

1. The company hasn’t actually turned a profit to date
2. However, Twitter is a high profile investor and has ploughed $70 million into the company
3. SoundCloud enables artists to upload music and share on blogs and social media. It has particular strength in the dance music sector
4. Earlier this year SoundCloud launched its own streaming service like that of Spotify and Apple Music
5. Alexander Ljung and Eric Wahlforss founded the company in 2008 and are now the respective chief executive officer (CEO) and chief technical officer (CTO)
6. SoundCloud claimed in 2014 that it had a user base of 175 million
7. It has an impressive social media following, with 2.12 million Twitter followers and 6.5 million likes on Facebook
8. The app has a higher than four star average rating on Google Play based on feedback from more than 2.5 million users
9. At the moment there is an option to go ad-free, although Spotify may look to monetise the service with adverts being an obvious way of doing so
10. SoundCloud is widely seen as a good match for Spotify, which has 100 million users worldwide and 40 million subscribers  
11. SoundCloud has been credited with the rise of many artists, including Lil’ Yachty, PartyNextDoor and Bryson Tiller.
     

The deal is yet to be confirmed, with the Financial Times breaking the news that the two are in advanced talks according to people close to the negotiations.

Read the September 2016 issue of Business Review Europe magazine. 

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