After much speculation throughout the year, Spotify has reportedly backed out of its proposed purchase of SoundCloud.
According to TechCrunch, negotiations have ceased after months of talks between the two streaming companies, with sources suggesting that Spotify walked away as it felt that the buyout could ‘negatively impact its IPO preparation.
Spotify’s interest in SoundCloud had been linked to rumours that it is planning to go public next year, with an increase in market share viewed as appealing for potential investors. However, the same source said that Spotify’s interest in SoundCloud dimmed because “it doesn’t need an additional licensing headache in a potential IPO year”.
In July, rumours began circulating that SoundCloud founders and investors were considering selling the company, which it values at around $1bn. Although sources claim that it was struggling to find a buyer at that price.
In June, the company raised funds of $70m from Twitter as part of a $100m funding round, which valued the firm at around $700m Bloomberg sources said.
The platform, which currently has around 175 million users, launched a premium service earlier this year, which offers an ad-free streaming service and wider access to songs for $10 (US) / £9.99 (UK) per month.
Spotify and SoundCloud have yet to issue a statement or response.
Last month, Spotify head of content programming for Spotify UK, Australia and New Zealand, George Ergatoudis, refused to comment on the rumoured buyout in his Big Interview with Music Week.
