We finally know the price of the Gimlet and Anchor acquisition. Spotify paid $340 million to buy the podcast networks. The announcement of the deal, which occurred last week, did not initially disclose the figure that Spotify paid. The price released was found in the SEC filing, which was uncovered by Recode’s Pete Kafka.
— Peter Kafka (@pkafka) February 14, 2019
The payments were mostly in cash. Kafka previously reported that Spotify paid around $200 million for Gimlet. If this is correct, this would mean Anchor cost Spotify $140 million. These healthy figures mean investors will get to reap the benefits, especially if they invested in the early stages.
Gimlet Media Inc. is a podcast network and digital media company founded by Alex Blumberg and Matthew Lieber in 2014, while Anchor is a podcast production app that allows users to create and distribute podcasts.
According to Crunchbase, Gimlet raised $28.5 million from investors, including Stripes Group, WPP, Betaworks, and Lowercase Capital. Anchor, on the other hand, raised $14.4 million. Crunchbase data shows that Accel, GV, Homebrew, and Betaworks also invested in Anchor.
Spotify’s spending spree doesn’t seem to be over yet. The music streaming platform is still looking to expand its podcast lineup and acquire even more companies focusing on podcasts. Spotify has around $160 million to spend in 2019.
In a blog posted last week, Spotify’s CEO Daniel Ek wrote that “audio — not just music — would be the future of Spotify” was his intention when he founded the streaming service back in 2006, but that he didn’t reveal that up front.
Now, Spotify wants to ensure podcasts are given as much support as music on the platform. Courtney Holt, the head of Spotify Studios, told TechCrunch in January:
“People who consume podcasts on Spotify are consuming more of Spotify — including music. So we found that in increasing our [podcast] catalog and spending more time to make the user experience better, it wasn’t taking away from music, it was enhancing the overall time spent on the platform.”
Ek explained that Spotify can become part of the next phase of audio by adding podcasts to their platform. Podcasts can help in educating, training, challenging, entertaining, and inspiring the masses. Ek said podcasts can “bring us together and break down cultural barriers.” The CEO also said that podcasts are constantly evolving with time but the podcast industry is still a business that is in its infancy. Despite these shortcomings, Ek believes that the podcast industry has great potential to grow into something much more mainstream.