Spotify buys audio tech startup Findaway in a major push to expand beyond music streaming and recreate its success with podcasts
Spotify is one of the world’s most popular music streaming services, with over 356 million monthly active users, including 158 million premium subscribers. The music streaming behemoth has seen explosive growth in revenue and customer base in recent years.
With billions of dollars war chest, Spotify is trying to expand beyond music streaming services into the audio business through acquisitions and massive investments. Unlike previous acquisitions of companies like Tunigo, Seed Scientific, Cord Project, Soundwave, and CrowdAlbum in 2016, Spotify makes foray into live audio programming, podcasting, and exclusive contracts. According to research firm Omdia, the global audiobooks market is expected to be worth $9.3 billion by 2026 from $4 billion in 2020.
In 2019, for example, Spotify acquired three podcast companies, including Gimlet Media, the maker of the popular podcasts “Crimetown” and “Reply All.” The spending spree didn’t end there. As we also reported back in March and June, Spotify also acquired live audio app Locker Room maker Betty Labs to take on Clubhouse.
Fast forward eight months later, Spotify announced it has acquired audio tech startup Findaway in a major push to expand beyond music streaming with the inclusion of audiobooks on its platform as it tries to recreate its success with podcasts. The terms of the transaction, which is expected to close in the fourth quarter, were not disclosed.
Founded in 2004 by Blake Squires and Christopher Celeste, the Solon, Ohio-based Findaway partners with audiobook publishers such as Amazon’s Audible, Apple iBooks, Google, and Storytel to offer a global audiobook catalog. The company also owns Voices, which helps authors to self-publish.
“This is the first big move…what we want to achieve is for Spotify consumers to be able to buy any audiobook on Spotify and listen to it,” Chief Research & Development Officer Gustav Söderström said in an interview.
In addition to buying audio tech companies, Spotify also launched Clubhouse Clone Called Greenroom on iOS & Android, marking its first foray into creating a social media platform. Also in June, Spotify bought Paris Hilton-backed podcast discovery Podz, a tech startup that developed an auto-generated “audio newsfeed” for podcasts. The terms of the deal were not disclosed. In the past few years, it has spent around $900 million on podcast assets to help Spotify rise to the top of the podcast market.
“We know from a survey that many of our users who listened to true crime podcasts also went on to buy audiobooks about true crime,” said Söderström. “That’s a big potential for publishers because we think we have a user base that is a really good target for audiobooks as well.”
Spotify’s total monthly active users rose 19% to 381 million in the latest quarter with revenue of about 2.5 billion euros ($2.87 billion).