Spotify has made another acquisition as it continues to expand the services it offers 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 Stockholm-based company is the creator 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, much like Apple’s GarageBand, as we noted in the previous coverage.
Terms of the agreement were not 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 price information as we learn.
According to Crunchbase, the startup had raised $8.5 million to date, most recently via a $6 million Series A round last year led by Nordic VC.
The move signals Spotify’s intentions to not only be a distributor of streaming music and other audio content, but also to help facilitate its creation.
It follows several other recent launches also focused on better supporting artists using its platform, including offering artists real-time streaming data on new releases through a dedicated mobile app. It also launched other services in areas such as merchandising and events.
Notably, Spotify tried and eventually gave up buying Soundcloud, another popular music streaming platform with the creator community. The acquisition signals one way Spotify may seek to reach out to this community regardless, and that it continues to consider whether to provide more services to creators alongside distribution.
Soundtrap today is a very small company. The company has 35 employees and last year had sales of just 1 million crowns ($118,000), with a loss of $2.6 million, according to Dagens Industri.
Spotify is currently valued at $16 billion and hotly tipped for an IPO, and this is part of its long road to building more services and potential revenue streams before that, to show the world that it’s more than a simple digital streaming service that has so far struggled to turn a profit.
According to Soundtrap’s post, its entire team will join Spotify following 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” ideal fit.
“The essence of Soundtrap is to bring collaborative, easy-to-use music-making capabilities to anyone with an electronic device and a passion for music,” reads Soundtrap’s post.
“When we launched, we were delighted to see Soundtrap a hit with consumers and quickly followed up with an educational version that has been widely adopted by schools. It’s 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 new favorite artists.”
The company’s software works on iOS, Android, Chromebook, Linux, Mac and Windows, allowing users to record their creations with their own device’s microphone and then save them to the cloud. They can also collaborate with others in real time or share their work with friends.
The software has also become popular with teachers for classroom use, leading Soundtrap to become a Google for Education Partner. This has 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; Industrial background; 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 of Nordic Capital; Linus Andreen, CEO and co-founder of Artisto Tracks, a record and publishing company; and CFO at Mantex AB Lars Bergström; and others.
The team also thanks Board Chairman Fredrik Granström for his announcement.