Satellite radio broadcaster SiriusXM paid $75m for a minority stake in Sweden-based audio streaming platform SoundCloud yesterday as part of a deal that will give it two board seats.
SoundCloud runs an online music streaming platform well known for being a destination where new artists upload their own music directly to get exposure. Successful artists that have begun by uploading their songs there include Billie Eilish, Post Malone and Khalid.
The deal comes after SoundCloud initiated an advertising sales agreement in 2019 with Pandora, the online radio platform acquired by SiriusXM for $3.5bn earlier the same year. The funding will go to product development and the strengthening of SoundCloud’s services.
SiriusXM CEO Jim Meyer said: “SoundCloud’s unique platform serves a vital role in today’s music ecosystem where new artists are discovered and build their fan base, and established artists experiment and connect directly with their fans in highly effective ways.
“We admire SoundCloud’s loyal and growing audience, its offering for creators, and its reputation and popularity in global music communities. We believe this is another opportunity to continue creating value for SiriusXM stockholders by investing in expanding digital audio platforms.”
Merchant bank Raine Group and Singaporean government-owned investment firm Temasek acquired a majority stake in SoundCloud in 2017, with reports suggesting they were set to pay $170m for a 53% share in a deal that included Union Square Ventures, Doughty Hanson Technology Ventures and Atlantic Technology.
The company had previously raised about $190m in equity funding and $105m in debt financing from investors including social media company Twitter, over-the-top media company Chernin Group, IVP, Kleiner Perkins Caufield & Byers, GGV Capital and Index Ventures.
Raine Group was financial adviser for SoundCloud on the deal while Morrison & Foerster was legal counsel. SiriusXM employed Allen & Company as financial adviser while Weil, Gotshal & Manges provided legal counsel.
