Twitter extends SoundCloud partnership with multi-million dollar investment

Music streaming service SoundCloud has secured a $70 million investment from social networking platform, Twitter.

The investment is part of SoundCloud’s current $100 million funding round, which if successful, will be their biggest fundraising drive to date, and value the music-tech company at around $700 million.

In a statement, a SoundCloud spokesperson confirmed the investment by Twitter.

“Both companies facilitate and inspire contemporary culture to happen in real time while reaching millions of people around the world.”

“This investment will enable SoundCloud to remain focused on building value for creators and listeners alike, and to continue the global rollout of many company initiatives such as our recently launched subscription service, SoundCloud Go,” the spokesperson said.

The alignment between these two platforms comes at a crucial time both.

Twitter is struggling to deliver its shareholders a notable spike in active monthly user growth, and SoundCloud is moving into direct competition with Spotify, Apple, Tidal, and now, Amazon. All of which have not reported a profit from their music streaming businesses.

Twitter CEO Jack Dorsey said in a statement to Recode: “Earlier this year we made an investment in SoundCloud through Twitter Ventures to help support some of our efforts with creators,” he said.

“They’ve been great partners of ours over the years and their community-supported approach mirrors ours in many ways,” he said.

Just two months ago SoundCloud stated that Twitter Moments will now support its Audio Cards, promising curators “a whole new audio dynamic to the experience”.

Many of Twitter’s most-followed users are musicians, so it’s not a surprising investment under the reinstated leadership of a music-loving Dorsey.

And let’s not brush past Twitter’s failed app, Twitter Music, which disappeared almost as quickly as it arrived.

The social networking platform openly values music and is prepared to invest; potentially paving the way for a future acquisition of SoundCloud.

Ironically, Twitter almost acquired the streaming service in 2014 at today’s market valuation – but ultimately Twitter let their exclusive negotiation window lapse when the pair could not mutually agree on a purchase price.

To steady its loss-leading position, the Berlin-based SoundCloud raised $35 million in debt earlier this year, providing much-needed relief as it struggles to monetise an impressive 75-million active monthly users.

Jake Challenor is the CEO at social-first digital shop Jaden Social and writes about social media atInsideSocial.com.au. @soundslikejake