SoundCloud Receives Massive $75 Million Investment From Sirius XM

Sirius XM has invested $75 million in SoundCloud, a popular music streaming platform that enables artists to easily publish and share their works with a network of over 175 million users. SoundCloud tracks can also be shared on social media platforms, such as Twitter, Facebook, and Instagram. The likes of Post Malone and Billie Eilish have used the platform to promote their early efforts, and even Tesla CEO Elon Musk has gotten in on the action.

The recent press release announcing the investment also indicated that the “minority investment” resulted, at least in part, from SoundCloud’s positive business relationship with Pandora, a Sirius XM subsidiary. Established in 2019, the SoundCloud-Pandora agreement allows clients to buy SoundCloud ads through Pandora’s interface.

SoundCloud will use these new funds to “accelerate its product development” and bolster its existing services. The investment comes at a crucial time for SoundCloud, which has long fielded investors’ offers, both to overcome short-term revenue concerns and expand the reach of its services. The streaming platform was facing dire financial straits in 2017, and only a $170 million investment allowed operations to continue.

As part of a plan to improve cash flow and profitability, SoundCloud announced last year that it would offer users premium options, which include the opportunity to upload songs to leading streaming platforms automatically. And to enhance artists’ ability to collect royalties and maintain control of their works, SoundCloud acquired Repost Network, a rights management and distribution company.

The investment by Sirius XM is significant, as the company completed its $3.5 billion acquisition of Pandora in February 2019. Sirius Satellite Radio and XM Satellite Radio merged in 2008, and over the last 12 years, the combined brands have added a substantial number of subscribers (nearly twice as many as in 2008). The combined operation has also experienced a dramatic uptick in annual revenue.

Sirius XM is not the only company that has expressed interest in acquiring SoundCloud. Twitter was reportedly interested in buying the streaming giant circa 2014, but the social media giant eventually settled for making a $70 million investment. Similarly, Google, Spotify, and other companies have engaged in purchase talks, but a largescale deal has not come to fruition.

The SoundCloud-Pandora agreement is one of the main drivers behind the investment by Sirius XM. The collaboration between the two companies allows clients to buy SoundCloud ads through Pandora’s interface, which has been a successful revenue generator for both companies. By investing in SoundCloud, Sirius XM is not only strengthening its relationship with Pandora, but also expanding its reach in the music streaming space.

The investment is expected to accelerate SoundCloud’s product development and strengthen its existing services. With the new funding, SoundCloud is poised to expand its user base and enhance its position in the highly competitive music streaming market. The company’s premium options and acquisition of Repost Network are part of a larger strategy to improve cash flow and profitability, and the investment by Sirius XM is a significant step towards achieving those goals.

In conclusion, the investment by Sirius XM in SoundCloud is a major development in the music streaming industry. SoundCloud’s ability to enable artists to easily publish and share their works with a network of over 175 million users has made it a popular platform among musicians and music lovers alike. The investment by Sirius XM is expected to accelerate SoundCloud’s growth and strengthen its position in the market. As the music streaming industry continues to evolve, SoundCloud is well-positioned to thrive and continue to provide a platform for artists to showcase their creativity and reach a global audience.