It wasn’t that long ago that it was rumored and then confirmed that Twitter Inc (NYSE:TWTR) was looking to buy the music service SoundCloud. That didn’t happen in 2014, but today Twitter, presumably looking for a new means for customers to increase their engagement, has invested $70 million in the company and it’s expected that another $30 million or so will come according to sources familiar with the deal speaking with ReCode.
Twitter CEO Jack Dorsey confirmed the deal but was quite vague in his comments about the investment.
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“Earlier this year we made an investment in SoundCloud through Twitter Ventures to help support some of our efforts with creators,” he said. “They’ve been great partners of ours over the years and their community-supported approach mirrors ours in many ways.”
SoundCloud is presently valued at around $700 million following a couple of funding rounds including a debt round.
SoundCloud has gone the same route as Twitter and not spoke about the deal’s details or expectations though with this story breaking that is likely to change.
Why the two are doing business is also a bit of a mystery though SoundCloud did recently launch a subscription service and could certainly use Twitter’s help in its promotion as the service’s success is deemed necessary for the company’s competitiveness if not survival. Twitter likely just wants some music for its slowing users.
Twitter, as your likely aware, has taken a beating on The Street and SoundCloud while seemingly worth $700 million was worth that two years ago.