Twitter is diversifying away from its social media roots with a $70m investment in music streaming service SoundCloud, just two years on from its snubbed takeover overtures.
Citing sources familiar with the deal Recode reports that Twitter could end up sinking as much as $100m into the business, which now has a market valuation of some $700m.
Confirming the deal Twitter chief executive Jack Dorsey said: “Earlier this year we made an investment in SoundCloud through Twitter Ventures to help support some of our efforts with creators.”
On the other side a spokesperson for SoundCloud said: “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.”
Speculation suggests that Twitter may be looking to form a strategic partnership with SoundCloud in order to enhance growth and engagement whilst SoundCloud may be eyeing Twitter as a medium for promoting its subscription services.