Spotify has acquired two social-focused startups, Soundwave and Cord Project, as the music-streaming titan looks to ramp up its product development arm and fend off competition from big-name rivals.
Founded out of Dublin, Ireland, in 2012, Soundwave has built up a steady following of music fans who connect with other users around the tunes and bands they love. It’s basically a social network for music fans, who can create their own profiles and see what people around them are listening to. It also has an in-app messaging feature that lets anyone create topic-specific groups to chat about their favorite sounds.
Launched by two former Googlers in New York back in 2014, Cord Project‘s main app, Cord, is a voice-messaging platform built for mobile devices and wearables. So while it’s not a music-specific product, it may give some clue as to what Spotify has in store for the future, though all Spotify will say is: “The team will remain in New York where they will build a new product group that will focus on creating compelling content experiences.”
Though Spotify didn’t disclose the terms of the two deals, Soundwave had raised around $3 million in funding to date, and Cord Project has secured around $2 million, so a pure guess would suggest that the combined value of the deal could be somewhere in the low-to-mid tens-of-millions of dollars.
In terms of what will happen to both companies’ respective services moving forward, Spotify wouldn’t confirm whether they would be closed or not. A spokesperson told VentureBeat: “We are evaluating next steps but have nothing to announce right now.”
It seems like they will remain open for now, but the apps will likely be shuttered eventually, given that Spotify said the teams from both companies will be joining Spotify’s product development arm, “where they will further boost Spotify’s existing strengths in developing engaging and innovative music experiences.” In other words, this sounds like an acqui-hire.
Spotify doesn’t acquire many startups. In fact, it has only bought three other companies, to date — Tunigo, the Echo Nest, and Seed Scientific. Its previous buys have centered on music-discovery, data, and analytics. And with Soundwave and Cord Project on board, it looks like Spotify is continuing that tradition, though it is now also placing much more emphasis on the social aspect of the music-streaming realm.
Today’s news comes 24 hours after Spotify and Starbucks launched a new partnership aimed at boosting each other’s respective customer bases in the U.S. The tie-up will see a “new digital music experience” arrive in more than 7,500 coffee shops across the U.S., with patrons able to identify music playing in-store through the Starbucks Mobile app and open the song directly within Spotify.
With competitors such as Apple Music making headway in the music-streaming arena, Spotify is looking to gain mindshare and supercharge its development team to stay ahead of its rivals.