Twitter Invests in Music Streaming Startup SoundCloud
Reports peg the deal at $70 million.
Twitter has made an investment in music streaming startup SoundCloud.
The deal, which Recode pegs at $70 million of a $100 million round, comes less than three months after SoundCloud launched paid service Go in an effort to capture a piece of the subscription music business.
Twitter CEO Jack Dorsey on Tuesday told Recode that the investment was "to help support some of our efforts with creators." He added that SoundCloud has "been great partners of ours over the years and their community-supported approach mirrors ours in many ways."
Twitter has made music-related efforts in the past. Most notably, in 2013 it launched the #Music app, a stand-alone streaming service that surfaced popular songs and emerging artists. The project was shut down the following year.
SoundCloud launched in 2008 and became a popular home for unsigned and indie artists to distribute their work. The service ruffled feathers with the major music labels in its early days, but with the launch of the $9.99-a-month subscription service Go, the company has placed an emphasis on working with the music industry to compensate artists.
SoundCloud's February earnings report shows that the Berlin-based company was burning cash. Revenue grew by nearly 54 percent to $19.7 million but its losses before taxes nearly doubled to $41.8 million.
A company spokesperson confirmed the Twitter investment with the following statement: "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."