Music discovery platform Pandora agreed yesterday to acquire assets from Rdio, the US-based music streaming service that had raised $125m from investors including online communication software provider Skype, for $75m.
Rdio launched its music streaming service in 2010 but, faced with intense competition from the likes of Pandora, Spotify and Soundcloud, as well as offerings from bigger players such as Google and Apple, it has had to file for chapter 11 bankruptcy protection.
Pandora is acquiring unspecified technology and intellectual property from Rdio and plans to offer jobs to several members of the company’s team. It is not however acquiring Rdio’s operating business, which will likely be auctioned off in the bankruptcy proceedings.
Skype participated in a $17.5m round in 2011 that also featured Mangrove Capital Partners, and Atomico, which followed an undisclosed amount of seed funding in 2009.
Rdio subsequently raised $108m through October 2014, and signed a deal with media firm Cumulus Media in which Cumulus took a 15% stake in return for $75m of promotional commitments.
Rdio will shutter its service in the upcoming weeks but will continue to provide it uninterrupted for the time being.
Pandora’s purchase of the technology hints that it may seek to add on-demand streaming to its existing online radio service. Its purchase of the Rdio assets follows its $450m acquisition of event ticketing technology provider Ticketfly last month.
Brian McAndrews, Pandora’s chief executive, said: “We are defining the next chapter of Pandora’s growth story.
“Adding live music experiences through Ticketfly was a transformative step. Adding Rdio’s impressive technology and talented people will fast-track new dimensions and enhancements to our service. I couldn’t be more optimistic about Pandora’s future and the future of music.”