Social media company Twitter has invested $70m in Germany-based music streaming platform SoundCloud through its Twitter Ventures unit, Recode reported yesterday.
Twitter made the investment as part of a series E round likely to reach $100m in size and which would value SoundCloud at $700m, the same valuation at which it closed a $60m series D in January 2014.
Founded in 2007, SoundCloud runs a music streaming service that as of July 2015 had 150 million registered users. It initially had a reputation as a freer, more artist-friendly platform, partly because it was slower to sign licensing agreements with major record labels than rivals like Spotify.
SoundCloud has since sealed licensing deals with Warner Brothers, Sony Music and Universal Music, which enabled it to launch a paid subscription option called SoundCloud Go earlier this year.
A SoundCloud spokesperson told Recode: “We can confirm that Twitter has made an investment in SoundCloud. 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 Twitter investment increased SoundCloud’s total equity funding to about $190m, and comes after the company secured $35m in debt financing from Tennenbaum Capital Partners in January this year.
Media and entertainment company The Chernin Group took part in SoundCloud’s series D round, investing alongside Institutional Venture Partners, Kleiner Perkins Caufield & Byers, GGV Capital, Index Ventures and Union Square Ventures.
Twitter had reportedly entered talks with SoundCloud in early 2014 over an acquisition said to be sized at $1bn, only to withdraw in May that year. Reports in late 2014 suggested SoundCloud was preparing a $150m series E round at a $1.2bn valuation but no such round was closed.