Spotify doubled down on podcasts last week with a double deal to buy podcast networks Gimlet and Anchor. Those acquisitions were initially undisclosed, but Spotify has quietly confirmed that it spent €300 million, just shy of $340 million, to capture the companies.
That’s according to an SEC filing — hat-tip Recode’s Peter Kafka — which reveals that the transactions were “primarily in cash,” Spotify said. Kafka previously reported that Spotify paid around $200 million for Gimlet, which, if correct, would mean Anchor fetched the remaining $140 million.
Those numbers represent an impressive return for the investors involved, particularly those who backed the companies at seed stage.
Gimlet raised $28.5 million from investors that included Stripes Group, WPP, Betaworks and Lowercase Capital, according to Crunchbase.
Anchor, meanwhile, raised $14.4 million. Crunchbase data shows its backers included Accel, GV, Homebrew and (again) Betaworks.
Those deals represent a good chunk of change, but Spotify still has more fuel in the tanks.
As we reported last week, it plans to spend a total of up to $500 million this year “on multiple acquisitions” as it seeks to further its position on podcasting which, to date, has been an after-thought to its focus on music. Less these deals, Spotify has around $160 million left in its spending budget for 2019.
In a blog post announcing the deals published last week, Spotify CEO Daniel Ek admitted that he didn’t originally realize that “audio — not just music — would be the future of Spotify” when he founded the business in 2006.
“This opportunity starts with the next phase of growth in audio — podcasting. There are endless ways to tell stories that serve to entertain, to educate, to challenge, to inspire, or to bring us together and break down cultural barriers. The format is really evolving and while podcasting is still a relatively small business today, I see incredible growth potential for the space and for Spotify in particular,” Ek explained.