Struggling micro-blogging service Twitter Inc (NYSE:TWTR) has made a massive investment of $70 million investment in SoundCloud, according to a report published by Re/code.
A couple of years ago in 2014, Twitter expressed major interest in acquiring SoundCloud, but the deal was called off after Twitter apparently took too long to make a move and the window for negotiation for the acquisition expired. Now, Twitter has decided to buy a stake in the service worth $70 million according to anonymous insider sources.
Upon contacting Twitter about the news, CEO Jack Dorsey admitted to Re/code that the company had, in fact, gone through with the investment in SoundCloud via Twitter Ventures earlier this year. Also, SoundCloud has also confirmed that the funding from Twitter had taken place on Twitter’s part.
According to Re/code, Twitter made the call to invest in SoundCloud during the latest round of funding, and that the backing could actually rise to around $100 million. Moreover, SoundCloud has been valued at $700 million in the round as a result of Twitter’s investment. The move from Twitter is the first of its kind after the failed acquisition in 2014, and the intent of it is still up in the air so far. Twitter launched its native music service Twitter Music in 2013 but quickly moved to shut it down in less than a year after the app was launched on the App Store, as the initial interest failed to materialize in genuine momentum for the service.
Even as its music service died down, Twitter has never actually backed away from making another foray into the music side of things. Thousands of users regularly share SoundCloud and Spotify links on Twitter every day, and it remains a major platform for sharing music-related information with other users. Twitter’s investment in SoundCloud could be a sign of things to come for the micro-blogging service, as more and more avenues are explored, both new and old, in the hope that something will click somewhere and Twitter’s ship would be steadied.