Twitter’s $70mn SoundCloud investment goes awry

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San Francisco, Feb 24 (IANS) Twitter has lost almost all of the $70 million money it had invested in music streaming platform SoundCloud, the company said in its 2017 annual report.

According to the filing, the company had to write off a total of $66.4 million of the $70 million it had invested into Soundcloud as part of a $100 million round of funding in June 2016, tech website Variety reported late on Friday.

SoundCloud ran out of money in early 2017 but soon secured a deal of $170 million of new funding from US-based financial institution Raine Group and Singapore’s Temasek in August 2017.

The deal came with a corporate restructure, according to which many of the start-up’s early investors, including SoundCloud’s founding CEO Alexander Ljung, were removed.

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Twitter was one of the investors who were on the losing side of that deal.

The report does not mention SoundCloud by name but said that “the investee (completed) a financing with third parties and reorganisation”.

SoundCloud was reportedly valued $700 million when Twitter invested in it. Before receiving the investment from Raine and Temasek that value had plunged to $150 million.

Twitter acknowledged its annual report that “the carrying value of this investment was not expected to be recoverable within a reasonable period of time”.

–IANS

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