Spotify’s acquisition of SoundCloud reportedly dropped in favor of IPO
One of Spotify’s initial and more positive financial backers is excited for 2017 — the year that the music streaming service may finally post black ink. But will profit motive necessarily stifle its growth mission? One source at Spotify says it might.
TechCrunch was told that the company’s bid to buy out rival service SoundCloud has ended because of the additional paperwork required. Pile that on top of rumors that Spotify is already signing papers away for an IPO and it could’ve ended up too much work to bear.
The economic sense of a SoundCloud deal seems to make less sense at this point, though the cultivation of a more involved and artistic user base would’ve been helpful to stimulate new revenue.
Spotify last reported its user base at 100 million with its paid subscriber pool up to 40 million. Meanwhile, SoundCloud has also improved its earnings standing with the introduction of its subscription service, SoundCloud Go, but remains unprofitable — as has Spotify for its corporate history.