×

Twitter’s Annual Report Reveals That Its $70 Million SoundCloud Investment Was a Bust

Twitter’s lost almost all of the money it had invested in SoundCloud, the company disclosed as part of its 2017 annual report Friday. The company had to write off a total of $66.4 million of the $70 million it had invested into the music service in 2016, according to the filing.

Twitter had been in on-and-off talks to acquire SoundCloud for years, but instead ended up investing $70 million into the music service as part of a $100 million round of funding back in June of 2016. However, SoundCloud ran out of money in early 2017 and wasn’t able to raise any additional financing.

SoundCloud finally secured a Hail Mary deal that included $170 million of new funding from the Raine Group and Singapore’s Temasek in August of 2017. However, that deal came with a corporate restructure that wiped out many of the start-up’s early investors, and ultimately also forced out SoundCloud’s founding CEO Alexander Ljung.

Twitter was apparently on the losing side of that deal as well, as Friday’s report shows. The report doesn’t mention SoundCloud by name, but all but spells who it is talking about by mentioning that “the investee (completed) a financing with third parties and reorganization.”

SoundCloud was reportedly valued $700 million when Twitter invested in the audio startup. Before receiving the cash injection from Raine and Temasek, that value had plunged to $150 million. That resulted in Twitter acknowledging that “the carrying value of this investment was not expected to be recoverable within a reasonable period of time,” according to its annual report.

Twitter’s own history with music has been a rocky one even before this write-down. The company at one point hired a team to develop and launch a dedicated music app, but shuttered those efforts just a year after its launch. Around the same time, Twitter was also in advanced talks to acquire SoundCloud, but ultimately pulled out of the deal last-minute.

More Music

  • WOODSTOCK 99

    Woodstock '99: Remembering the Chaos 20 Years Later

    Woodstock’s stalled-before-it-started 50th anniversary celebration has taken over much of the news cycle this summer, but some of us haven’t forgotten the disaster that was Woodstock ’99, which kicked off its main stage 20 years ago today. The planned 30th anniversary of the most famous music festival in history started with good intentions, but quickly [...]

  • Taylor Swift Finally Turns 'Red' With

    Taylor Swift Turns 'Red' Again With Third Song from New Album: 'The Archer' (Listen)

    Taylor Swift fans have had a very faith-based relationship with the new material she’s rolled out in advance of her new album — having faith that the album would really be as intimate and personal as promised, after the mindful froth-pop of the first two singles, “Me!” and “You Need to Calm Down.” That faith [...]

  • Maluma

    A Reluctant Maluma Finally Finds the Screen Role He's Been Waiting for

    It seems like everyone wants a piece of Maluma these days, but the 25-year-old Colombian superstar has played hard to get when it comes to making the transition to the big screen. The singer has been picky in turning down possible crossovers — but an offer to be paired with Jennifer Lopez has caught his [...]

  • BTS61st Annual Grammy Awards, Arrivals, Los

    MTV VMAs Have Created a K-Pop Category ... and Some BTS Fans Are Livid About It

    The MTV Video Music Awards have added a new K-pop category this year, but if you thought that expansion would please a plurality of BTS fans, think again. BTS fans have taken to Twitter and other social media to charge that it’s actually a racist or xenophobic move designed to ghettoize their favorite group and [...]

  • Lizzo Warner Chappell

    Lizzo Signs Publishing Admin Deal With Warner Chappell

    Lizzo has signed a global administration deal with Warner Chappell Music. The agreement covers her existing and future work, including the breakout hit “Juice” and follow-up “Truth Hurts” from debut album “Cuz I Love You.” Speaking to Variety of the success of “Truth Hurts,” Lizzo recently said: “I love being platinum. I worked so hard. [...]

  • Dr Dre Selling Woodland Hills Mansion

    Dr. Dre Seeks Sale of Woodland Hills Mansion

    A lavish mansion in a quietly ritzy, guard-gated enclave discreetly nestled into the rugged foothills above L.A.’s Woodland Hills, long owned by Andre Young, aka rapper, record producer and near-billionaire entrepreneur Dr. Dre, has come for sale at $5.25 million. Dre himself, worth about $800 million, according to Forbes, hopes to more than double his [...]

  • Iggy Azalea

    Iggy Azalea on Album Delays, Twerk Pits, Trolling and Going 'More Tongue-in-Cheek'

    Iggy Azalea just unleashed her first album in five years, and the title speaks for itself. “In My Defense” sees the Australian pop star talking back, taking control of her masters and giving self-confidence to her fan base across the world. Azalea — real name: Amethyst Amelia Kelly — made a name for herself with [...]

More From Our Brands

Access exclusive content