SoundCloud Saved By $170 Million Emergency Funding As CEO Steps Aside (techcrunch.com) 16
Last month, SoundCloud announced it was cutting about 40 percent of its staff in a cost-cutting move to help it compete against larger rivals like Spotify and Apple. One week after that announcement, TechCrunch published a report claiming "the layoffs only saved the company enough money to have runway 'until Q4' -- which begins in just 80 days." It now appears the company has closed the necessary funding round to keep itself afloat. TechCrunch reports: CEO Alex Ljung will step aside though remain chairman as former Vimeo CEO Kerry Trainor replaces him. Mike Weissman will become COO as SoundCloud co-founder and CTO Eric Wahlforss stays as chief product officer. New York investment bank Raine Group and Singapore's sovereign wealth fund Temasek have stepped in to lead the new Series F funding round of $169.5 million. SoundCloud declined to share the valuation or quantity of the new funding round. Yesterday, Axios reported the company was raising $169.5 million at a $150 million pre-money valuation. That's a steep decline in value from the $700 million it was valued at in previous funding rounds. The new Series F round supposedly gives Raine and Temasek liquidation preferences that override all previous investors, and the Series E investors are getting their preferences reduced by 40 percent. They're surely happy about that, but it's better than their investment vaporizing. Raine will get two board seats for bailing out SoundCloud, with partner and former music industry attorney Fred Davis, and the vice president who leads music investments, Joe Puthenveetil, taking those seats.
I hope they figure it out. (Score:5, Insightful)
SoundCloud is one of the few social platforms that just stays out of your way and lets you enjoy the thing you're there for. It's just so functional and clean and focused on the music.
I hope they figure out how to save things. And I hope they don't destroy the platform to do it.
Re: (Score:2)
Re: (Score:2)
I started using it recently. They have lots of obscure stuff (mainly remixes and club sessions) that aren't on spotify, and the sound quality is better. So as a user I like what they are giving away for free.
How are they planning to make money? Their catalogue has too many holes to be worth a monthly subscription (i.e. compete directly with Spotify / Deezer), and they don't seem to have any other way of making money.
Better ways to make money (Score:1, Insightful)
If SoundCloud wanted to be profitable, they shouldn't have been trying to run a legitimate business. Instead, run a global warming scam and claim to be producing green stuff. People fall for that scam all the time and are willing to throw tons of money at it. If you want to get rich, join the global warming scam instead of running a legitimate business.
Re: Why would VCs even invest in Soundcloud? (Score:4, Interesting)
Spotify and Apple aren't really competitors to soundcloud. I only listen to soundcloud, simply because the others don't have the content. Soundcloud is full of livesets, podcasts, other longer playing content and remixes and stuff not released on regular labels. And it just works. Compared to soundcloud, Spotify and the likes are a boring desert of mediocrity and outdatedness. Soundcloud is more of a publishers medium (like radio) with channels and programmes while Spotify is trying to be a library.
Web 2.0 bubble about to pop... (Score:3)