Twitter has secured a stake in the lucrative music streaming industry through an investment in a platform it once considered acquiring.
A new report reveals that the social network has financed SoundCloud to the tune of $70 million as part of a funding round that saw the platform raise around $100 million. Both Twitter and SoundCloud confirmed that an investment took place, but refused to comment on the alleged financial details of the deal.
Twitter evidently never lost interest in SoundCloud, despite deciding against a planned acquisition in 2014. Back then, the social network was still nursing its wounds after a failed attempt at launching its own music streaming app. Meanwhile, SoundCloud was on the rise, securing $60 million in investment that saw its valuation reach $700 million. If Twitter had made a move, it would have ended up being its biggest acquisition ever.
Today’s outlook is decidedly different for the respective companies. Despite raising a reported $100 million, SoundCloud’s valuation remains flat. Twitter, on the other hand, is facing its fair share of investor investor pressure over its failure to attract new users.
Additionally, SoundCloud’s clout has decreased since the onslaught of music streaming exclusives. The allegiance of major pop artists to music platforms, such as Tidal, and Apple Music has impacted rival services. There was a time when the likes of Drake, and Beyoncé uploaded tracks to SoundCloud but that all changed with the dawn of the single-platform exclusive.
Therefore, the newly revealed partnership makes sense for both the social media giant and the music streaming startup. Twitter has already integrated SoundCloud tracks into its Audio Cards feature, which are also compatible with other streaming giants. The partnership could potentially entail further crossovers for the respective platforms. After all, music makes up a significant part of the conversation on Twitter, and SoundCloud could benefit from a social media push for its recently launched subscription service.