Spotify acquires two start-ups, widens Starbucks partnership

Streaming leader Spotify has purchased two tech start-ups which focus on social and messaging, for an undisclosed fee.

The New York-based Cord Project launched in 2014 with messaging app Cord. It raised under US$2 million with funding injections from venture capital funds Lerer Hippeau and Metamorphic, among others. The Cord app will now be shut down as part of Spotify’s purchase.

Cord co-founder and CEO Thomas Gayno – who along with co-founder Jeff Baxterpreviously worked at Google’s Creative Lab – said five out of the seven Cord staffers will be joining Spotify. They’ll remain in New York to“build a product group focused on creating compelling content experiences.”

Dublin-based mobile music discovery company Soundwave launched in 2013 and raised just under US$3 million on its own. It currently has 1.5 million app installs across 190 countries, but it’s likely to be shut down with its patents and technology rolled into Spotify.

Soundwave CEO Brendan O’Driscollsaid the company’s data can provide information to Spotify about what its users are listening to in territories where streaming doesn’t have a big presence. Soundwave’s employees will reportedly relocate to Spotify’s offices in Stockholm and San Francisco.

The two purchases point to Spotify boosting its social products, a move already hinted to with its recent partnership with Genius.Although the company is tight-lipped on how exactly Cord Project and Soundwave’s technology will be used. Spotify has however made it clear it won’t utilise Cord Project’s voice messaging features.

“This acquisition is not specifically about voice messaging and there are no plans to enter that space,” said Spotify’s statement. “[…]The Cord Project team will build a product group focused on creating compelling content experiences, and the Soundwave team will help to enhance the overall consumer experience on Spotify.”

Spotify does already have a messaging service within its app; when users hit the share button within a playlist they can send it to another user who is a friend on the app and include a message. The Soundwave and Cord Projectacquisitions seem to be more about developing engagement and communication with and between its users.

“The acquisitions of both Cord Project and Soundwave give us the opportunity to bring two extremely talented and like-minded teams into the Spotify family,” said Shiva Rajaraman, Spotify’s VP of Product in a statement. “We’re excited to welcome them on board, and are looking forward to their contributions in shaping the future of music engagement.”

Meanwhile, Spotify and Starbucks have extended a partnership first struck last May. The agreement gave baristas and employees the ability to control the music playing in their stores, and create playlists of popular Starbucks music.

In the latest initiative, the early tech adopting coffee brand has digitally replaced its once-popular CD rack in its 7500 stores through the United States. Via a Now Playing feature, customers can discover on their mobile phones what music is playing in the store (a problem due to in-store crowd noise and low music playback volume), and add it immediately to their Spotify playlist.

Every week, Starbucks will highlight emerging and established artists for them to check out, as well as offer playlists curated by the company, and its best-loved tracks of the past 20 years. The Starbucks Mobile App identifies the playlist in the given store being played by PlayNetwork’s CURIO content delivery system, and then shares this information with customers in the app.

Customers (Starbucks has 10 million rewards loyalty members alone) can also help shape Starbucks in-store playlists by favouriting songs.

“Together with Starbucks, we’re creating a unique new digital music experience that offers Starbucks customers and Spotify users the ability to discover even more music at Starbucks and enjoy the same music and more on Spotify, whenever they want and wherever they are,” Spotify said.

“Music has played a pivotal role in our stores for over forty years,” added Howard Schultz, Chairman and CEO of Starbucks. “[This] is the next era in that experience. We are merging the physical and digital.”

Starbucks’ music initiatives have included a successful CD-selling business launched in 1999 and which ended last February after the switch to streaming. But ideas such as allowing patrons to burn their own compilations in stores, and the 2007-launched Hear music label which signed Paul McCartney and James Taylor, were flops.