Spotify has made another acquisition as it continues to build out the services it offers to artists beyond basic streaming. It has acquired online music studio startup Soundtrap, the company announced via a blog post this morning.
The three year-old company, based in Stockholm, is the maker of a freemium (paid and free) cloud-based, collaborative music and podcast recording studio that includes its own collection of loops, as well as the ability to connect your instruments, a little like Apple’s GarageBand, as we have noted in previous coverage.
The terms of the deal have not been disclosed. Swedish publication Dagens Industri notes that a year ago the company was valued at around $24 million (200 million Swedish kronor). We’re asking around and will update with more on the price as we learn it.
According to Crunchbase, the startup had raised $8.5 million to date, most recently via a $6 million Series A last year, which was led by Nordic VC.
The move signals Spotify’s intentions to not just be a distributor of streaming music and other audio, but also to help facilitate its creation.
It follows several other recent launches also focused on better assisting the artists using its platform, including offering artists real-time streaming data on new releases through a dedicated mobile app. It’s also launched other services in areas like merchandising and events.
Notably, Spotify tried and ultimately walked away from buying Soundcloud, another music streaming platform that is popular with the creator community. This acquisition signals one way that Spotify may be looking to try to address that community regardless, and that it continues to eye up the opportunity for providing more services for creators alongside distribution.
Soundtrap is a very small company today. The company has 35 employees and last year had revenues of just 1 million kronor ($118,000), with a loss of $2.6 million, according to Dagens Industri.
Spotify is currently valued at $16 billion and hotly tipped for and IPO, and this is part of its long road of building out more services and potential revenue streams ahead of that, to show the world that it’s more than just a digital streaming service that has so far been hard-pressed to make a profit.
According to Soundtrap’s post, its entire team will be joining Spotify as a result of the acquisition. This includes founders Björn Melinder, Fredrik Posse, Gabriel Sjöberg and Per Emanuelsson.
The Stockholm-based startup also describes the move as a “culturally, creatively and strategically” great fit.
“The essence of Soundtrap is to give easy-to-use, collaborative, music-making capabilities to anyone with an electronic device and a passion for music,” reads the post from Soundtrap.
“When we launched, we were delighted to see that Soundtrap was a hit with consumers and we soon followed up with an education version that has been widely adopted by schools. This is a perfect fit because Spotify has also helped democratize music by helping millions of artists connect with millions of fans while helping listeners discover their favorite new artists,” it says.
The company’s software works across iOS, Android, Chromebook, Linux, Mac and Windows, allowing uses to record their creations with their own device microphone, then save them to the cloud. They can also collaborate with others in real-time or share their work with friends.
The software also became popular with teachers for use in the classroom, which led to Soundtrap becoming a Google for Education Partner. This led to classroom adoption at a rate of 200 schools per week, the company claimed last fall.
Other investors included Peter Sterky, the former CFO and COO of Spotify; Industrifonden; Swedish producer and composer Andreas Carlsson; Truecaller founders Alan Mamedi and Nami Zarringhalam; Magnus Bergman, an early investor in Truecaller and Prezi; Kristoffer Melinder, Joakim Karlsson and Ulf Rosberg from Nordic Capital; Linus Andreen, CEO and co-founder of Artisto Tracks, a record label and publishing house; and CFO at Mantex AB Lars Bergström; and others.
The team also credits Chairman of the Board Fredrik Granström in its announcement.
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