Soundtrap, a cloud-based music creation platform, is set to become an independent company again after Spotify disclosed plans to sell the business back to its founders nearly six years after the acquisition.
The streaming giant acquired Stockholm-based Soundtrap in November 2017 from its founders Per Emanuelsson, Björn Melinder, Gabriel Sjöberg and Fredrik Posse.
While specific financial details of the deal were not disclosed, Swedish tech news outlet Breakit reported at the time that the transaction was valued at at least $30 million.
This estimation was based on Soundtrap’s substantial increase in value since its series A funding round in 2016, where it raised $6 million and was valued at $25 million at that time.
Speaking about its acquisition of the startup at the time, Spotify said that, “Soundtrap’s rapidly growing business is highly aligned with Spotify’s vision of democratizing the music ecosystem.”
Sweden-based Soundtrap has operated as a standalone app since its acquisition by Spotify. In August 2022, the app started offering live collaboration and auto-save tools as new test features, allowing artists to work on a project from different devices in real time.
It followed the launch of other features to boost its user base including the rollout of a podcast recording, editing and publishing tool called Soundtrap for Storytellers in May 2019.
“Together with Soundtrap’s co-founder, Björn Melinder, we’ve made the decision to acquire the company from Spotify, returning to an independent operation.”
Per Emanuelsson, Soundtrap
News of Spotify’s Soundtrap divestment was reported by Swedish news outlet Dagens Industri on Friday (June 9), which said that around 100 current Spotify employees will be offered to work with the newly independent Soundtrap.
The decision to sell Soundtrap suggests a shift in Spotify’s strategic focus away from music creation.
“Soundtrap was built to provide the best collaboration platform for making music online. Together with Soundtrap’s co-founder, Björn Melinder, we’ve made the decision to acquire the company from Spotify, returning to an independent operation,” Per Emanuelsson was quoted by Music Ally as saying on Friday.
“Over the last five years, we’ve greatly benefitted from Spotify’s expertise and global reach, enabling us to rapidly scale our service and launch new products. We thank Spotify for helping to set us on the trajectory we’re on today and are very excited for the future.”
Charlie Hellman, Spotify’s Vice President and Global Head of Music Product, said Spotify is, “proud of what we’ve achieved together, and are excited to see Soundtrap’s next phase of growth over the coming years.”
From its launch in 2011 to January 2021, Soundtrap had been used by over 10 million people, according to a study published in February.
The decision to sell Soundtrap comes as the company carries out a restructuring of its podcast division.
Last week, Sahar Elhabashi, VP, Head of Podcast Business, said Spotify will cut 200 jobs in its podcast unit, representing about 2% of the company’s total workforce.
Elhabashi said the layoffs were part of a wider effort to move to “the next phase of our podcast strategy,” which “begins with maximizing consumption from the massive audience we’ve established through format innovation and ensuring that more creators in more places achieve success” and includes “the introduction of more business models to help more creators make meaningful money from their work.”
Music Business Worldwide