Published
Thu, Dec 8, 2016, 23:36
- TechCrunch reports the streaming giant Spotify walked away from the table ahead of their potential 2017 IPO.
Spotify is no longer in the running to buy SoundCloud.
As previously reported, the Berlin-based SoundCloud is actively seeking a buyer. In September, Financial Times reported that Spotify was in "advanced talks" to acquire SoundCloud, but now TechCrunch says the deal has gone cold.
A source told the startup-minded publication negotiations halted because Spotify "doesn’t need an additional licensing headache in a potential IPO year," referring to the "complexity and financial cost that comes with negotiating with music labels, something that is hugely important to SoundCloud."
Spotify, fighting off Apple Music for streaming dominance, recently raised $1 billion in funds that are incentivized if the Swedish-based company goes public in 2017. The online streaming service currently boasts 100 million users, 40 million of whom pay for the premium version. Apple Music meanwhile, has notched 20 million subscribers in its first 18 months.
SoundCloud also introduced a subscription service this year, bumping its annual revenue by 43% to $28 million, but they've yet to report a profit. Earlier this year, the auditing firm KPMG warned that SoundCloud needs to raise additional funds in order to remain solvent.