Spotify is reportedly looking to strengthen its grip as the market leading music streaming service with the purchase of SoundCloud.
Rumours that a bid for SoundCloud would be made by Spotify arose last month after founder Daniel Ek revealed a desire to showcase new artists, and now the Financial Times has revealed that the Swedish company is “advanced talks” to acquire the competitor digital music platform.
Negotiations on a fee are ongoing, with Spotify having the $1 billion it raised in convertible debt earlier this year to help fund the deal.
Although SoundCloud currently operates at a loss, it has seen high profile investment from companies such as Twitter. According to industry analyst Mark Mulligan, Spotify, which also operates at a loss, will see the purchase as a necessary step to fend off competition from Apple Music “as it heads toward an initial public offering.”
Spotify currently has 40 million paid subscribers, while Apple Music trails with close to 17 million.
Keep an eye on Mixmag.net for developments in the story.
Patrick Hinton is Mixmag's Digital Intern, follow him on Twitter