Almost six years after announcing it would buy music collaboration and creation platform Soundtrap, Spotify is selling the 11-year-old company back to its founders.
Spotify executives and the founders of Soundtrap recently confirmed their latest deal, which comes at a time when the former Stockholm-headquartered company is working to cut spending and expand its spending in a broader pursuit of profitability to lower. While the exact financial and ownership details of the transaction are unclear, Soundtrap co-founder and CEO Per Emanuelsson has announced that he will continue to run the DAW independently.
“Soundtrap was designed to provide the best collaboration platform for online music making,” explained Emanuelsson, who had specifically served as Soundtrap’s managing director at Spotify. “Together with Soundtrap co-founder Björn Melinder, we made the decision to take over Spotify’s business and return to an independent company.
“Over the past five years we have benefited greatly from Spotify’s expertise and global reach, allowing us to rapidly scale our service and bring new products to market. We thank Spotify for helping us launch the path we are on today and are very excited about the future,” concluded the Pragmatic Work founder.
And in comparatively brief remarks, longtime Spotify exec (and current vice president and global head of music products) Charlie Hellman addressed Soundtrap’s “great strides.”
“Soundtrap continues to make great strides in empowering more people to make music together online,” said former LimeWire CEO Hellman. “We are proud of what we have achieved together and look forward to Soundtrap’s next phase of growth in the years to come.”
With Spotify likely poised to further cut spending and scale back certain aspects of its operations in the coming months, it’s worth keeping an eye out for similar sales. In May 2023, the platform discontinued music trivia game Heardle after less than a year of ownership – a move that angered die-hard gamers and prompted calls to sell the title back to its creators.
However, no such sell-back has been announced at this time, and it remains to be seen if the original owners of the Wordle-inspired game – which had players guessing song titles after listening to audio snippets – would be receptive to the proposal.
In any case, Spotify isn’t the only music industry company to sell acquired companies to its founders during the year. And after admitting a week ago it “overpaid” for exclusive content, the service fired about 200 podcasting employees and merged Parcast and Gimlet.
Spotify (NYSE:SPOT) stock has reportedly surged nearly 83 percent since the start of 2023, reports Morgan Stanley analyst Manan Gosalia repeated an “overweight” rating and a price target of $170 per share.