The world's biggest music streaming platform Spotify of
Sweden and China's Tencent said on Friday they had agreed to take
minority stakes in each other.
With the deal both companies would seek to “explore collaboration opportunities”, they said in a joint statement.
Tencent's
subsidiary Tencent Music Entertainment (TME) and Spotify will pay cash
for unspecified shareholdings in each other, while the Tencent parent
company will also invest in Spotify by buying existing shares in the
Swedish company.
Tencent, which operates social media
platforms in China, is also the country's largest online music services
company, claiming hundreds of millions of users. “We are delighted to
facilitate this strategic collaboration between the two largest digital
music platforms in the world,” Tencent President Martin Lau said in the
statement.
Spotify Chief Executive Daniel Ek said both the
companies “see significant opportunities in the global music streaming
market for all our users, artists, music and business partners” and
would allow them “to benefit from the global growth of music streaming”.
The
Tencent deal comes amid talk of a stock market flotation for Spotify
expected in coming months, with analysts estimating the company to be
worth at least $10 billion.
Spotify says it has about 60 million paying premium subscribers, with another 80mn using the platform's free streaming service.
In April, Spotify had already signed a global licencing agreement with the Universal Music Group.
Chinese
social media and video game giant Tencent became more valuable than
Facebook last month as investors sent the company soaring into the top
five of the world's biggest firms. WeChat has revolutionised China's
tech industry and even daily life for millions of Chinese.