It was rumored back in September that Spotify was in advanced talks with SoundCloud in order to acquire the service, something that would have likely strengthened Spotify's position in the music streaming business. According to a new report out of TechCrunch and based on information from an unnamed source, it now appears as though Spotify has walked away from any possible deal.
Since reports emerged that the company was in advanced talks with SoundCloud to complete an acquisition, speculation has been mounting as to what the deal could mean for both services, such as an increase in revenue, a bigger Spotify catalog and more. But now it appears that any possibility of a deal has been canceled due to Spotify's IPO plans. It was only rumored recently that the company was planning an IPO listing for next year and it appears that the company prefers to avoid any hassle with music companies that could come from a SoundCloud acquisition, the only downside being that Spotify won't be able to get its hands on SoundCloud's relatively large user base, as well as its independent music catalog. A deal with SoundCloud could have given Spotify a significant advantage over Apple Music and Deezer, as it would have allowed the service to better cater to niche users. Although, in any case Spotify is showing no sign of slowing down, especially after it reached over 100 million users, 40 million of which are paying subscribers.
The walking away from a deal marks reportedly the third time Spotify and SounCloud have been in talks over the past couple of years, though previous deals have reportedly collapsed due to the price. Obviously, with the impact the acquisition could have on Spotify being questionable, it's no surprise the company has opted for an IPO listing, considering the amount of money they could raise, something that would allow them to pay off debts, as well as invest in marketing and the service itself. Unfortunately for Spotify though, SoundCloud's financial situation is thought to be slowly worsening, so they do risk losing the service to a rival such as Apple Music, Deezer or even Amazon and their Prime Music service.