Spotify has abandoned talks about potentially buying Soundcloud.
In September of this year it was reported that Spotify were in advanced talks to buy the Berlin based music platform. At the time of the announcement that Soundcloud was looking to sell, Bloomberg reported that they were seeking $1 billion for the business.
Yesterday it was reported through TechCrunch that talks between Spotify and Soundcloud had since gone cold. A source said that Spotify abandoned talks because “it doesn’t need an additional licensing headache in a potential IPO (Initial Public Offering) year”.
The deal would have seen another boost for Spotify’s continued expansion as it competes with other growing streaming services such as Apple Music. As of this summer, Spotify has 100 million subscribers, 40 million of whom pay for the premium service. Meanwhile, Apple music has grown to have 20 million subscribers in its first 18 months.
Soundcloud’s recent introduction of a premium service has seen its revenue increase by 43% up to $28 million. However, they are yet to report a profit, which signals that the business may remain in financial trouble unless they find a potential buyer.
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