Music streaming service Spotify is buying podcast companies Gimlet and Anchor as it looks to take on Apple's popular iTunes' podcasting platform.
Gimlet Media has a podcast studio with dedicated IP development, production and advertising capabilities. Anchor has a platform of tools for podcast creators as well as an established and rapidly growing creator base.
Spotify founder and CEO Daniel Ek said in a blog post Wednesday that Spotify has become the second-biggest podcasting platform in a little less than two years.
"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," he wrote.
Nick Quah of Hot Pod, a newsletter that covers the podcast industry, said in an email to subscribers that the deals help Spotify branch out from music and differentiate its product. Quah also anticipates Spotify may try to monetize podcasts in the same way that it's struck deal with musical acts to upload their music directly and automatically receive royalty payouts.
Financial terms of the transactions were not disclosed. The deals are targeted to be completed in the first quarter.
Shares of Spotify Technology SA tumbled more than 5 percent before the market open on Wednesday.