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Launched in 2008, Spotify is the world’s most popular audio streaming subscription service with a staggering 356 million users, including 156 million subscribers and is available in 178 countries. In the past two years, the audio streaming giant has gone full-throttle on podcasts, spending US$ 200 million to acquire Gimlet Media and signing an exclusive licensing deal worth over US$ 100 million with The Joe Rogan Experience-one of the world’s most popular podcasts with upwards of 200 million monthly listens and views. In addition to the deal with Joe Rogan, it has also signed deals with Michelle Obama, Kim Kardashian and Warner Brothers. Despite making over US$ 9 billion in revenues last year, the audio streaming giant is still not profitable, recording a net loss of US$ 664 million. So will the pivot to podcasts and its recent acquisitions pay off? 

Add to Cart is a unique series that analyses the acquisitions of some of the largest and most well-known companies in the world. In this edition of the series, we’ll be analysing the acquisitions of Spotify.

Why Podcasts?

With over 850k active podcasts available in 100 languages, we are in the golden age of podcasts. In the US alone, podcast listeners are estimated to reach 132 million by 2022. There’s also been a multi-fold increase in ad revenues in the podcast industry, rising from a meagre US$ 69 million to over US$ 1 billion this year. Spotify’s move towards podcasts can be better understood in the context of royalties in the music industry. Every time a song is downloaded, Spotify has to pay royalties, meaning the more successful the company is at attracting listeners, the more it has to pay. But with podcasts, the company doesn’t have to hand over a percentage of its revenues to record labels.


The analysis is based on data from Crunchbase. The startups have been classified according to various industries based on data from Pitchbook, and the sector classification is based on Global Industry Classification Standard (GICS). The sector classification is subjective and has been made considering the sector/industry that the startups closely resemble. A total of 20 startups have been considered for this analysis, and this is by no means an exhaustive list of all the startups that Spotify has acquired over the years. Of the 20 startups, the acquisition price was available for three.

Spotify’s acquisitions are spread across five countries, with the US leading the charge, accounting for 75% of them with a median age of 4yrs. Sweden, where the headquarters of Spotify is based, ranks second and accounts for 10% of the acquisitions with a median age of 4yrs. Tunigo was a Stockholm-based music discovery app that allowed users to browse and discover new music and playlists on Spotify. The startup was acquired by Spotify in May 2013 for an undisclosed sum. Soundtrap is an online recording platform that provides a collaborative, cloud-based digital audio workstation. Until its acquisition, the startup had raised US$ 8.5 million. Spotify acquired the startup in Nov 2017 for an undisclosed sum. 

The communication services sector accounts for 75% of the acquisitions, and startups in this sector have a median age of 4yrs. Megaphone is a podcast advertising platform that provides tools to publish, monetize, and measure the podcast business. Spotify acquired the startup in Nov 2020 for US$ 235 million. Founded in 2014, Gimlet Media is an award-winning narrative podcasting company based in New York, US. Until its acquisition, the startup had raised US$ 28.5 million in six funding rounds. Spotify acquired the startup for US$ 200 million in Feb 2019. Founded in 2015, Anchor FM is an application that allows podcasters to create, distribute, and monetize their podcasts. The app has built-in uploading, recording, and editing tools and also offers advanced analytics to help understand and grow one’s audience. Spotify acquired the startup for US$ 140 million in Feb 2019. 

The information technology sector is home to 25% of the acquisitions with a median age of 2yrs. Mediachain is a blockchain data solution for connecting applications to relevant media and information. It is a peer-to-peer, decentralized database for sharing information across applications and organizations. It was acquired by Spotify in Apr 2017 for an undisclosed sum. CrowdAlbum was an online platform that aggregated photos and videos of events shared on social media using its algorithm-based technology. Spotify acquired the startup in Apr 2016. Until its acquisition, the startup had raised US$ 100k in funding from Social Starts and Base Ventures. 


Overall, Spotify has disclosed acquisitions worth US$ 575 million, and the business/productivity software industry accounts for 41% of the amount. Spotify’s shift in focus towards podcasts seems to be paying off, with the company’s share of monthly active users who listen to podcasts rising from 16% to 21% in the first half of 2020. In a dramatic shift in the podcast industry, Spotify’s US podcast listenership is said to overtake Apple Podcasts’ this year, according to eMarketer. Apple Podcasts’ share is expected to be 23.8% in 2021, down from 34% in 2018. The future of audio streaming may lie in more personalization, more original content, and live streaming. 

For more extensive analysis and Market Intelligence reports feel free to approach us or visit our website: Venture Capital Market Intelligence Reports | VCBay.

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