SiriusXM has invested $75 million in audio platform SoundCloud, which will use the additional investment to enhance its product development and services.
As a result of the investment, the U.S.-based SiriusXM will be a minority stakeholder in Berlin-based SoundCloud, while SoundCloud’s Board of Directors will expand to include two individuals designated by SiriusXM.
In 2019, SiriusXM acquired streaming music platform Pandora as part of a $3.5 billion all-stock transaction. The SoundCloud investment also follows a successful ad sales relationship between SoundCloud and Pandora, which started in 2019. This agreement enables advertisers and brands to purchase SoundCloud’s U.S. ad inventory directly through Pandora, leveraging the company’s direct sales capabilities, audio platform and vast data. The combined U.S. audience for SoundCloud and Pandora reaches more than 100 million unique listeners.
SoundCloud rounded out 2019 with $200 million in forward revenue run-rate in the fourth quarter of 2019.
“SoundCloud’s three consecutive years of strong financial performance directly reflect the success of our creator-led growth strategy,” said Kerry Trainor, Chief Executive Officer, SoundCloud. “We have an exciting roadmap focused on deepening the connections between creators and listeners that fuel creator discovery, career growth and the evolution of music culture on SoundCloud. We’ve built a great relationship with SiriusXM through our highly successful Pandora ad sales agreement, and their investment gives us added capital flexibility to accelerate our vision and take advantage of strategic opportunities as they arise.”
“SoundCloud’s unique platform serves a vital role in today’s music ecosystem where new artists are discovered and build their fan base, and established artists experiment and connect directly with their fans in highly effective ways,” said Jim Meyer, Chief Executive Officer of SiriusXM. “We admire SoundCloud’s loyal and growing audience, its offering for creators, and its reputation and popularity in global music communities. We believe this is another opportunity to continue creating value for SiriusXM stockholders by investing in expanding digital audio platforms.”
The Raine Group served as financial advisor to SoundCloud, and Morrison & Foerster as its legal counsel. Allen & Company LLC served as financial advisor to SiriusXM, and Weil, Gotshal & Manges LLP as its legal counsel.
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