VC-backed Spotify bolts on Soundwave and Cord Project

Katharina Semke
20 January 2016

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Swedish music streaming service Spotify, which is backed by 23 investors including Creandum and Northzone, has acquired music app Soundwave and communication service Cord Project.

Spotify did not comment on its plans for the newly acquired companies, only stating that it aims to boost its product development arm and build a better experience for its customers. Financial details of the deal were not disclosed.

Software developers from both startups will join the Spotify team. Spotify, which has a market cap of more than $8bn, is competing with Apple for dominance in the digital music market.

Soundwave, which is headquartered in Dublin and launched in 2012, has raised less than $3m in total. The majority of its backers were business angels, but it also received funding from VCs such as ACT Venture Capital and Enterprise Ireland.

Founded in 2014 and based in New York, Cord Project has only had one funding round to date, raising $1.4m in seed capital in September 2014 from lead investors Lerer Hippeau Ventures and Metamorphic Ventures, as well as business angels.

Previous funding
In June 2015, Baillie Gifford, Lansdowne Partners and Rinkelberg Capital led a large syndicate of investors in a $526m round of growth capital funding for Spotify. Other investors participating in this latest round included Halcyon Asset Management, GSV Capital, DE Shaw & Co, Technology Crossover Ventures, Northzone, P Schoenfeld Asset Management, Senvest Capital and Discovery Capital Management. Goldman Sachs also participated in the round via its global private opportunity partners fund.

In November 2013, Technology Crossover Ventures provided a $250m round of growth capital funding to Spotify.

In November 2012, Goldman Sachs, along with AFSquare, the Coca-Cola Company, Fidelity Ventures and Lakestar, led a $100m round of growth capital funding for Spotify.

Company
Founded in 2006, Spotify develops a digital music-streaming service that gives on-demand access to songs on mobile devices and computers. Headquartered in Stockholm, the company has additional offices in Australia, Belgium, Germany, Denmark, Spain, Finland, France, Italy, the Netherlands, Norway, Poland, Sweden, New York, Hong Kong and Mexico. It achieved a turnover of $1.3bn in 2014.

People
Spotify – Daniel Ek (CEO).
Soundwave – Daniel O'Driscall (founder).
Cord Project – Thomas Gayno (founder).