Tesco paid 10 million for the music service

British supermarket giant Tesco has announced the acquisition of music streaming service We7 for £10.8 million ($16.75 million).

The British retailer reports that the new acquisition will "provide customers with a wide selection of music and complement the current music offerings in Tesco stores, both in-store and online." This purchase will expand the chain's online content offerings. Tesco recently acquired the streaming video service Blinkbox.

As a result of the deal, Tesco acquired a 91% stake in We7. The retailer will acquire the remaining shares within a week.

Founded in the UK in 2007 by former Genesis frontman Peter Gabriel, the We7 music streaming service fully launched in late 2008. Since then, We7 has tweaked its business model several times, most recently offering a streaming radio service in a format similar to Pandora, but with a feature that allows listeners to receive alerts about the latest music news, as well as other radio features.

Despite expanding to Belgium and Ireland last year, We7 suffered significant financial losses. Now, as part of Tesco and backed by the successful multinational retailer, the service will be able to compete with Spotify and other players in the music market.