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SiriusXM Holdings has invested $75 million in SoundCloud, the open audio platform beloved by musicians that has struggled to find a place in a the streaming-service hierarchy. SoundCloud will use this additional investment to accelerate its product development and enhance the services that fuel its global community of creators and listeners, according to the announcement.

While Soundcloud teetered toward bankruptcy several years ago, in 2017 it attracted a $170 million investment from Raine Group and Temasek and has since stabilized. That deal saw the company’s cofounders, Alexander Ljung and Eric Wahlforss, gradually phasing out of the company while former Vimeo CEO Kerry Trainor became chief executive.

Originally launched in 2007 by Ljung and Wahlforss as a forum for DJs, Soundcloud’s open platform provided a launchpad for countless developing musicians — ranging from Billie Eilish and Post Malone to Khalid and Bad Bunny — and became so popular that it even spawned a genre name: the “Soundcloud rap” of artists like XXXTentacion and Lil Peep. But as its popularity grew, its loose licensing practices came under attack from major music companies, and it underwent an awkward transition from a free service to a partially paid one. The situation grew so dire that in 2017, the company laid off 40 percent of its staff and closed two offices, and the founders warned that it might not have enough cash to see it through the end of that summer. However, the $170 million investment and Trainor’s leadership kept the company afloat, and the SiriusXM investment would seem to give it a fresh business perspective.

Having said that, SiriusXM’s $3.5 billion acquisition of streaming radio platform Pandora — which it has essentially absorbed, arguably eliminating much of that company’s individuality — suggests that a similar fate eventually may befall Soundcloud, although the platforms have very different models and functions.

However, the statements from company heads are all optimism and synergy. “SoundCloud’s three consecutive years of strong financial performance directly reflect the success of our creator-led growth strategy,” said Trainor. “We have an exciting roadmap focused on deepening the connections between creators and listeners that fuel creator discovery, career growth and the evolution of music culture on SoundCloud. We’ve built a great relationship with SiriusXM through our highly successful Pandora ad sales agreement, and their investment gives us added capital flexibility to accelerate our vision and take advantage of strategic opportunities as they arise.”

“SoundCloud’s unique platform serves a vital role in today’s music ecosystem where new artists are discovered and build their fan base, and established artists experiment and connect directly with their fans in highly effective ways,” said Jim Meyer, Chief Executive Officer of SiriusXM. “We admire SoundCloud’s loyal and growing audience, its offering for creators, and its reputation and popularity in global music communities. We believe this is another opportunity to continue creating value for SiriusXM stockholders by investing in expanding digital audio platforms.”

The minority investment follows the highly successful ad sales relationship between SoundCloud and Pandora, a subsidiary of SiriusXM, which started in 2019. The agreement enables advertisers and brands to purchase SoundCloud’s U.S. ad inventory directly through Pandora, leveraging the company’s direct sales capabilities, targeting data, and audio programmatic platform. Together, SoundCloud and Pandora’s combined U.S. audience offering reaches more than 100 million unique listeners, creating the largest digital audio advertising marketplace.