Twitter is turning to music streaming to ramp up its now stagnant-for-months userbase, and has in the process, acquired a minority stake in SoundCloud for $70 Million, reports Re/code. Interestingly, it is the same company which Twitter walked away from buying at its own peak, a couple of years ago. Time flies !
According to Recode’s report, which cites inside sources, the investment is a part of a close to $100 Million round which Soundcloud is looking to close soon, after raising a $35 Million debt round last year. The valuation however will remain the same $700 Million — as it was in 2014 when the company raised close to $60 Million from multiple investors.
While there’s no official confirmation of the amount invested, Twitter CEO Jack Dorsey has confirmed that his company now owns a stake in SoundCloud. In a statement sent to Recode, Jack said,
Earlier this year we made an investment in SoundCloud through Twitter Ventures to help support some of our efforts with creators. They’ve been great partners of ours over the years and their community-supported approach mirrors ours in many ways.
The motive behind investment though, isn’t particularly clear. What is clear though, is the fact that this might not just be an investment sort of investment, there is much more strategy to it than money. Twitter has had a constant userbase for a long time now, and even though it has growing revenues, the same has failed to notch up investor confidence.
We’ve mailed both Twitter and SoundCloud for a comment, and will update this story once we receive the same. Stay tuned.