Jack Dorsey's Square buys Jay-Z's streaming startup Tidal for $297m

Fintech company Square (SQ) announced on Thursday it will acquire a majority ownership stake in Tidal, the music streaming service owned by musician Jay-Z.

Square expects to pay a mix of cash and stock of $297m (£213m). Tidal will operate independently within Square and Jay-Z along with Tidal’s other existing artist-shareholders, including wife Beyoncé, and Rihanna, will retain some ownership in the company.

On Twitter (TWTR), Square CEO and founder Jack Dorsey (who also runs Twitter), explained the rationale for the buy: "Given what Square has been able to do for sellers of all sizes and individuals through Cash App, we believe we can now work for artists to see the same success for them, and us. We’re going to start small and focus on the most critical needs of artists and growing their fanbases."

In a statement, Square said that the acquisition extends Square’s "purpose of economic empowerment to a new vertical: musicians. Artists are entrepreneurs with a dream and deserve access to systems, tools, and financial freedom to reach those dreams at every stage in their career."

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Jay-Z is expected to join Square’s board of directors subject to the closing of the transaction. He bought Tidal in partnership with other artists in 2015 for $56m. The service has had stiff competition from Apple (AAPL) Music and Spotify (SPOT).

Available in 56 countries, Tidal has more than 70 million songs and 250,000 high-quality videos in its catalogue along with original video series, podcasts, and thousands of playlists.

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In 2017, Jay-Z sold 33% of the company to Sprint, before it became part of T-Mobile (TMUS). Earlier this week, he bought back those shares and they will now be sold to Square as part of this deal.

Dorsey said on Twitter: "I’m grateful for Jay’s vision, wisdom, and leadership. I knew Tidal was something special as soon as I experienced it, and I’m inspired to work with him. He'll now help lead our entire company, including Seller and the Cash App, as soon as the deal closes."

Meanwhile the rapper said: "Jack and I have had many discussions about Tidal's endless possibilities that have made me even more inspired about its future. This shared vision makes me even more excited to join the Square board."

Last week, Jay-Z announced he had sold half of his high-end champagne company Armand de Brignac to luxury giant LVMH’s (MC.PA) wine and spirits division, Moët Hennessy, for an undisclosed price.

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