Spotify has turn down a deal to buy struggling music streaming company SoundCloud. There have been talks for months that the two company are heading for a union that could see Spotify grow even larger to fend off increase competition from Apple Music and TIDAL.
Although Spotify nor SoundCloud have commented on the failed deal, TechCrunch reported that the execs at Spotify backed out of the deal this week. This came as a surprise since a report from back in September suggested that there was a strong possibility that Spotify would buy SoundCloud ahead of its public IPO.
The failed deal comes as a surprise since SoundCloud drastically improved its business this year, posting a 43 percent jump in revenue to reach $28 million year-on-year, which is in sharp contrast to its $44 million lost the company posted in 2014. This year, the Berlin-based music streaming company started offering a $9.99 subscription that account for the majority of the revenue growth this year. But is it enough to stave off reports of nearing bankruptcy, only time will tell. For now SoundCloud has managed to change course and drastically improved its financial health. Unfortunately, that was not enough signal for Spotify to cut a check and acquire the startup company.
TC also reported that Spotify has declined to buy SoundCloud at least two other times over the last two years. Perhaps this may very well be their last attempt.
