(Reuters) — SoundCloud, the world’s hottest streaming music app, however one which has struggled to discover a worthwhile enterprise mannequin, stated it acquired new funding on Friday, insulating it from doubtlessly working out of money this yr.
The corporate, which laid off 40 % of its employees in July, stated in a weblog submit that the financing was raised from media-focused funding financial institution Raine Group of New York and Singapore’s sovereign wealth fund Temasek.
It didn’t disclose the quantity or its phrases. Raine and Temasek weren’t instantly available for remark.
One source aware of the funding stated it amounted to round $170 million (144 million euros), as reported on Thursday by on-line news web site Axios, which had obtained the deal’s time period sheet.
The corporate stated that as a part of the brand new funding, digital media veterans Kerry Trainor and Michael Weissman, respectively the previous chief govt and chief working officer of on-line video service Vimeo, would take the identical roles at SoundCloud.
The arrival of the previous leaders of Vimeo – one of many largest on-line video rivals to Google’s YouTube and Fb – raises the prospect SoundCloud could evolve past audio streaming in a extra music video-oriented course.
SoundCloud founder and former CEO Alexander Ljung has agreed to step apart to change into chairman of the board, it stated. Co-founder and Chief Know-how Officer Eric Wahlross will stay on the firm as chief product officer.
In July, SoundCloud fired 173 staff and closed its London and San Francisco workplaces to concentrate on Berlin and New York. A spokeswoman for SoundCloud stated final month it remained totally funded into the fourth quarter, whereas declining to touch upon what lay past.
“The investment will ensure a strong, independent future for SoundCloud, funding deeper development and marketing of its core tools used by millions of audio creators – musicians, DJs, producers, labels, managers and podcasters,” SoundCloud stated.
Again from the brink
SoundCloud stays the world’s hottest free music phone app, with roughly 88 million lively users, based on on-line viewers monitoring agency SimilarWeb. It’s supported partly by promoting, with only a small chunk of listeners paying charges.
In its weblog submit, the decade-old, Berlin-based firm stated that at present gross sales ranges, it was on monitor to greater than double its income to $100 million over the following 12 months.
However SoundCloud has struggled to develop a listener subscription enterprise mannequin to pay hefty royalties and compete with streaming music leaders Spotify, in addition to encroaching rivals Apple and Amazon.
Axios reported the time period sheet circulating amongst current traders since Tuesday set Friday as a deadline to comply with the brand new funding construction. It cited Ljung saying that in any other case, SoundCloud wouldn’t find a way “to continue as a going concern”.
Raine Group has been an lively U.S. investor in media and leisure properties. Temasek has been one of many world’s most lively know-how traders, backing roughly 90 firms within the sector stretching again to the dot-com period.