Music streaming company Spotify has decided not to acquire Berlin-based competitor SoundCloud, according to TechCrunch. Rumors of a potential deal circulated since late September, but in the end, Spotify found probable licensing issues too much to stomach with an IPO on the horizon in 2017, per the report.
While a combination of the two companies seemed to make sense, it’s unsurprising to see Spotify prioritize its much-anticipated public offering. In addition to licensing headaches, it’s long been reported that SoundCloud hasn't been the most financially sound enterprise—company documents showed an operating loss of €39 million in 2014. And although revenue is said to be on an aggressive growth curve since launching a subscription tier earlier this year, the last thing Spotify needs while prepping to go public is uncertainty about its bottom line.