×

Spotify Paid Nearly $340 Million to Buy Podcast Startups Gimlet and Anchor

Streaming-audio giant Spotify shelled out around €300 million, or about $337 million, to buy two podcasting companies — producer Gimlet Media and services provider Anchor FM Inc., the company said.

The deals for Gimlet and Anchor, announced last week, were primarily in cash, with the total purchase prices subject to closing adjustments, Spotify disclosed the figure in a Feb. 13 SEC filing.

Spotify isn’t done with its M&A move into podcasting: The company told investors it expects to invest $400 million-$500 million in podcasting acquisitions for 2019. But that target includes what it’s paying for Gimlet and Anchor, chief content officer Dawn Ostroff told Variety, indicating the first two deals represent the lion’s share of its podcast investment for 2019.

“We’re looking at a broad range of opportunities,” Ostroff said in an interview. “The business is so nascent. A lot of what we’re doing is obviously strategically targeting this area that we want to be a leader in.”

Whether Spotify’s big bet on podcasting pays off remains to seen. CEO Daniel Ek sees a growth opportunity in the space, noting that Spotify’s podcast listeners spend twice as much time on the service as non-podcast listeners and that people listen to traditional radio on average two hours daily. At the same time, he admitted that podcasting is a relatively small business today.

Brooklyn-based Gimlet set out to build “the HBO of audio,” Matt Lieber co-founder told Variety in 2017. The company has established itself in the podcast biz with popular scripted and unscripted shows, including “Homecoming” — adapted into a TV series by Amazon Studios — and “StartUp” and “Reply All.”

Gimlet had raised $28.5 million in funding from investors including WPP, Laurene Powell Jobs’ Emerson Collective, Cross Culture Ventures, Betaworks Ventures, Stripes Group, and Graham Holdings.

Anchor, based in New York, was founded in 2015 by Michael Mignano and Nir Zicherman. Described as a kind of YouTube for podcasts, Anchor claims it powers more than 40% of the industry’s new podcasts. The company had raised $14.4 million, according to Crunchbase, from investors including Accel, Acequia Capital, Betaworks, the Chernin Group, CrunchFund, Eniac Ventures, Nir Eyal, Omidyar Network, and Questlove.

With the podcast M&A strategy, Spotify forecast a full-year 2019 operating loss of between $228 million-$410 million (€200 million-€360 million) on revenue of $7.23 billion-$7.74 billion (€6.35 billion-€6.8 billion), up 21%-29% versus 2018. That’s after Spotify turned its first quarterly operating profit in Q4, of $107 million (€94 million).

Pictured above: Gimlet Media founder Alex Blumberg (l.) and Matt Lieber

More Digital

  • FaceApp is displayed on an iPhone,

    SAG-AFTRA Warns Members About FaceApp Terms of Use

    SAG-AFTRA is warning its 160,000 members about the “overreaching and invasive” terms of use for the FaceApp mobile application. FaceApp, developed by Russian company Wireless Lab, uses neural network technology to automatically generate transformations of faces in photographs. The app can be used to make users appear older, younger, or change gender. The terms include [...]

  • J. Cole

    Apple Music Launches 'Rap Life' Playlist

    Apple Music announced the launch of “Rap Life,” a new global playlist focusing on contemporary rap artists and culture. It replaces the former “The A-List: Hip-Hop” playlist. Said Ebro Darden, Apple Music’s Global Editorial Head of Hip-Hop and R&B: “We flipped it to dig deeper into into the lifestyle [and to] keep pushing the culture [...]

  • Billie Eilish

    ARRI, Mobile TV Group Back New Venture Revitalizing Streamed Concerts

    A new venture looking to bring a fresh approach to live-streaming concerts has gotten the backing of hardware heavyweights ARRI and Mobile TV Group. Wide+Close is launching with the mandate of shooting music performances with film cameras and cinematographers in order to give the content a more cinematic feel. “We want to take concert filming [...]

  • Fortnite Battle Royale

    How 'Fortnite' Fans Can Earn Loot by Watching YouTube Videos

    Epic Games and YouTube have teamed up with a special offer for “Fortnite” players — giving players of the popular battle-royale game rewards when they watch “Fortnite”-premiered content on the video platform. The catch: You have to watch at least 20 minutes of “Fortnite” special content or live esports broadcasts to receive the loot. Under [...]

  • Roku headquarters

    Roku Plans to Expand to Brazil, Other Countries (EXCLUSIVE)

    Roku plans to expand to multiple new territories in the coming months, Variety has learned. One of the first new markets for the company will likely be Brazil. An international expansion could help Roku grow its customer base, which in turn should lead to growing advertising revenues. Roku executives have been hinting at plans to [...]

  • Google Stadia Pro to Include 1

    Google’s Stadia Game Streaming Service to Include Free Monthly Game

    Google has been busy sharing additional details about its upcoming game streaming service Stadia, clearing up some confusion in the process. Stadia’s pro subscription tier, which will cost $10 per month, won’t be a Netflix-type subscription service. However, subscribers will get free games at the rate of about a title per month. That’s according to [...]

  • Crypt-TV-Facebook

    Facebook Signs Deal With Crypt TV for Slate of Five Horror Series

    Crypt TV, the digital studio founded by Eli Roth and Jack Davis and backed by Jason Blum, expanded its deal with Facebook, inking a content partnership to create a slate of five horror and monster-themed series exclusively for Facebook Watch. For Facebook Watch, it’s one of the first deals for a full slate of content [...]

More From Our Brands

Access exclusive content