The company didn't mention many details in their press release last week, but it leads one to believe that this has much to do with its recent agreement to be the audio backbone of Twitter Music. In fact, you could see this coming when SoundCloud basically rebuilt it's platform in December, improving the user interface and making it Flash-free.
My guess here is that SoundCloud saw in Twitter Music an opportunity to scale in a way not possible otherwise. They could get massive growth in a short period of time, which is a way for their investors to make their money back and more. In fact, SoundCloud received $50 million in January 2012 from KPCB, one of the most revered venture firms in Silicon Valley. KPCB also happens to be an investor in Twitter as well, so this collaboration was probably baked way back then and only coming out of the oven now.
While you could look at all this cynically as just a money grab, I don't think it is. On all sides there are well-regarded, highly competent people that have a tradition of caring for the customer as well as for making money. That's why I look forward to both the new SoundCloud and Twitter Music. What we see now is probably only the tip of the iceberg.
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