Social media giant invests $70 million for a stake in Soundcloud

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June 16, 2016 1:46 PM

The investment is part of a round that should close at about $100 million. The round is expected to peg Soundcloud's valuation at about $700 million.

Twitter Co-founder and newly announced CEO Jack Dorsey

Media reports confirm that social media giant, Twitter, has invested $70 million for a stake in online music streaming service, Soundcloud.

Last year, reports surfaced that Twitter wanted to acquire the company but then pulled out of the deal at the last minute.

According to a Recode report, the investment is part of a round that should close at about $100 million. The round is expected to peg Soundcloud's valuation at about $700 million.

Twitter CEO, Jack Dorsey did not give specific details of the investment but he said, “Earlier this year we made an investment in SoundCloud through Twitter Ventures to help support some of our efforts with creators. They’ve been great partners of ours over the years and their community-supported approach mirrors ours in many ways.”

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A Soundcloud spokesperson, in a statement made public, said, “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.”

Recode posits that Twitter might have eyes on a Soundcloud integration in the near future as it searches for more ways to increase growth and engagement while Soundcloud may leverage on the investment to use Twitter as a way to promote its new subscription service, Soundcloud Go.

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