Spotify backs out of deal to acquire SoundCloud to focus on impending IPO, says report

While rumours of an acquisition were on the horizon, Spotify has reportedly backed out of purchasing SoundCloud for fear that the acquisition could hurt its IPO preparation.

According to reports stemming the Financial Times back in September, Spotify was once again batting around the idea of acquiring the musical community platform SoundCloud.

However, a source familiar with the discussions at Spotify has told TechCrunch that the merger won’t be taking place after all. This source apparently went on to say that this acquisition would hurt the music streaming company’s IPO preparation.

While Spotify hasn’t officially stated that it will go public in 2017, though there has been much speculation about the possibility Furthermore, it’s likely that Spotify simply backed away from an additional legal situation with its impending IPO looming.

Spotify has apparently turned down requests to acquire SoundCloud twice before. In a recent announcement, the Sweden-based streaming company raised $1 billion USD in convertible debt in March, with terms that are favourable for Spotify to go public in 2017:

Reports indicate that SoundCloud’s revenue jumped this year by 43 percent to $28 million, largely due to the $9.99 subscription plan introduced this past year.

Related: Spotify reportedly in talks to buy SoundCloud as competition with Apple Music heats up

[source]TechCrunch[/source]