Twitter has invested approximately $70m (£49m) in Berlin-based music streaming company SoundCloud. Total investments by Twitter in SoundCloud could reach $100m, valuing the German firm at about $700m.
In 2014, the microblogging site wanted to acquire SoundCloud, but it backed out of the talks as "numbers did not add up". SoundCloud by then had more than 250 million users and had raised $60m in funding.
Confirming the investment, Twitter CEO Jack Dorsey told Re/code that his company now owned a stake in SoundCloud. Dorsey 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."
However, it is not clear if Twitter's investment is part of a partnership. But the deal makes sense as Twitter could use SoundCloud to increase its user growth, while SoundCloud could engage Twitter users and promote its subscription service.
The company recently extended its ad-free subscription services in the UK and Ireland, after making it available for users in the US. A spokesperson from SoundCloud said in a statement, "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," the spokesperson added.