Amazon.com Inc. today said that it has signed a deal to buy Wondery Inc., a venture-backed podcast startup with a reported audience of 20 million monthly listeners.

The deal will strengthen Amazon’s entertainment business, in which the online retail giant has invested billions of dollars in recent years to win more subscribers.

Amazon didn’t say how much it’s paying for Wondery. But the Wall Street Journal reported recently that Wondery was valued at north of $300 million during the acquisition talks, more than triple the valuation the startup is said to have received after its most recent funding round. An earlier Bloomberg report indicated that Apple Inc. and Sony Corp.’s music publishing arm also expressed interest in Wondery, which may explain why its valuation rose so sharply during the acquisition talks.

Wondery, based in Los Angeles, launched in 2016 with backing from Disney Co. subsidiary 20th Century Studios. The startup has published a series of hit podcasts spanning multiple genres, one of which was turned into a series by the Bravo television network.

The acquisition will buy Amazon not only Wondery’s sizable listener base but also a new revenue stream for its entertainment business. According to the Journal, Wondery was expecting to generate about $40 million in sales this year from a combination of podcast licensing fees and advertising. The latter business is said to account for about three-quarters of the startup’s revenue.

Amazon plans to integrate Wondery into its Amazon Music subscription-based music streaming service. However, the company stressed in a statement that “nothing will change for listeners, and they’ll continue to be able to access Wondery podcasts through a variety of providers.”

Amazon’s top rivals in the music streaming segment have also used acquisitions to help them more effectively target the podcast market. Apple was in September reported to have acquired Scout FM, a podcast aggregation and recommendation service, while Spotify bought podcast studio Gimlet in 2019. 

The Wondery acquisition could help accelerate Amazon’s growth plans for its entertainment business, which operates in multiple markets spanning music, audio books and video. The online retail giant has been investing heavily in recent years to expand the division. Amazon disclosed in early 2019 that it was expecting to spend more than $7 billion on original content that year and, a few months later, it bought a part of sports broadcaster Yes Network together with an investor consortium.

Image: Amazon