Spotify Not Buying SoundCloud (For Now)

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After weeks of rumors and speculation, Spotify is not buying SoundCloud. The Sweden-based streaming/digital download service has reportedly walked away from acquiring the online audio platform based in Berlin, after months of discussions. A source told to Tech Crunch that Spotify ultimately walked away because it feared that an acquisition could negatively impact its IPO preparation. Despite its 200m-strong creative community, SoundCloud has never turned a profit. In 2014, SoundCloud reportedly lost $44.19 million. SoundCloud auditor KPMG said in the report that the need for more investment represented “a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern.”

According to FT, this was not the first time the rivals considered combining: Spotify had been in talks to buy SoundCloud last spring and again after Twitter bought a stake in the company. However, the discussions ultimately fell apart because the two could not agree on a price, said people briefed on the matter.

Yehouda Silverman

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