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Google to acquire SoundCloud for $500 million after Spotify backs out of billion-dollar deal

SoundCloud has recently tried its hand at launching its own streaming service amidst a market already dominated by Spotify, Apple Music, Tidal, and Pandora.

This could be SoundClouds undoing though because even though SoundCloud Go has increased the company’s revenue stream, they are still at risk of losing large amounts of money or even going bankrupt if they do not find a new investor.

Despite the fact that three large music companies are already investing in SoundCloud, they are still conducting a search for some new investors.


Namely, the companies investing in SoundCloud are Universal, Sony and Warner. Now, it seems as though SoundCloud is not going to be invested in, but rather acquired by larger companies.

After SoundCloud lost around €51.2 million back in 2015, Spotify was in talks to acquire it for $1 billion, according to The Verge. However, Spotify backed out from the deal by virtue of them preparing an initial public offering (IPO) for this year.

Google may now be willing to hand SoundCloud a lifeline. The technology conglomerate may look to purchase SoundCloud for around $500 million, which is only half of the asking price, Business Insider reported.

However, SoundCloud CEO Alexander Ljung may be forced to bite after they only posted €21.1 million in revenue against their previously mentioned 2015 losses of €51.2 million.

SoundCloud’s charm lies in the fact that it is an excellent way for new musicians to be discovered. This is beneficial for both the listener and the artist, as using SoundCloud will allow users to discover heaps upon heaps of new music and the artists will get a chance at increased exposure for their works. Even big artists such as Chance the Rapper and Kanye West make use of SoundCloud.

SoundCloud is not looking to go down without a fight, as it has backed their premium services -such as SoundCloud Go – to dig them out of the hole they are currently in.

They have pretty good reason for doing this because they have around 175 million active users. SoundCloud go was made available in the US, UK, and Germany last year for a fee of $9.99 per month. Source: Yibada

Watch an introductory video to SoundCloud below:

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