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Twitter Takes $70 Million Stake in SoundCloud (Report)

Twitter has made a $70 million equity investment in music-streaming service SoundCloud, tech news site Recode reported, citing anonymous sources.

Reps for both companies confirmed that Twitter made an investment in SoundCloud but would not confirm the dollar figure.

Asked for more info, a Twitter spokeswoman referred to CEO Jack Dorsey’s comment on the SoundCloud investment. “Earlier this year we made an investment in SoundCloud through Twitter Ventures to help support some of our efforts with creators,” Dorsey said in a statement provided to Recode. “They’ve been great partners of ours over the years and their community-supported approach mirrors ours in many ways.”

SoundCloud, in a statement about the Twitter stake, said, “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.”

Twitter’s investment is part of a funding round in SoundCloud pegged at around $100 million, which would give it a valuation of $700 million, according the Recode report. That’s the same valuation SoundCloud had three years ago when it raised $60 million.

SoundCloud Go, a $9.99 monthly subscription service, aimed at competing with Apple Music, Spotify, Google Play Music and other streaming services, launched this spring. The company has raised $123.32 million to date, including $35 million in debt financing in January, according to Crunchbase. Investors include IVP, Chernin Group, Kleiner Perkins Caufield & Byers, Index Ventures, Union Square Ventures and Doughty Hanson Technology Ventures.

Ahead of its subscription launch, Berlin-based SoundCloud reached a licensing deal with Sony Music Entertainment, following pacts with the other two major music labels, Warner Music Group and Universal Music Group. The company’s service for uploading and sharing songs launched in 2008 — and as the site grew in popularity, it drew the ire of the music biz, as SoundCloud didn’t have licensing agreements with copyright holders.

Meanwhile, Twitter lately has been the subject of takeover speculation, given its relatively sluggish user growth over the last several quarters. On Monday, Microsoft said it will acquire business-networking site LinkedIn for $26.2 billion, fueling chatter that Twitter could be next in line to get snapped up.

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