Twitter has reportedly made a whooping $70m investment in SoundCloud’s streaming service as part of a funding that could round up to $100m. This follows rumors of a planned purchased by Twitter, a deal that was of course never consummated.
The reported deal is a tale of a money dumper investing in another since both companies made heavy losses in 2015. Twitter recorded $250m in loses while Sound Cloud posted $44 million. However, in the wake of this funding, SoundCloud’s value is expected to rise to a tune of $700m.
The latest Twitter injection will allow SoundCloud to better compete with major rivals Spotify — which has racked up over 30 million paying users — and Apple Music, which just announced hitting 15 million users. What this cash injection will be specifically used for is unknown at this stage, but one would presume that the investment will assist the development of new features, securing new content, and of course, keeping the lights on over a darkening business model.
–Digital Music News.