Struggling music streaming service SoundCloud closed a crucial round of funding to keep itself alive.
Current CEO Alex Ljung will sidestep as the company’s chairman to pave way for former Vimeo CEO Kerry Trainor as the new CEO.
Mike Weissman is appointed as the new COO, while SoundCloud co-founder and CTO Eric Wahlforss will take charge as CPO. The emergency Series F funding of about $169.5 million came from Singapore’s sovereign fund Tamasek and New York’s investment bank Raine Group.
— Alexander Ljung (@alexanderljung) August 11, 2017
According to reports, SoundCloud was raising $169.5 million at a $150 million pre-money valuation, which is a quite a sharp decline in value from the previous rounds of funding. SoundCloud was valued at about $700 million during the previous rounds. 2 board seats will be given to Raine for saving SoundCloud from sinking. Fred Davis and Joe Puthenveetil will be taking up those seats.
Soundcloud says that if it keeps its costs low and grows its total revenue, which is currently at a $100 million annual-run rate, it may ultimately get to breakeven and no longer need injection of investor funds.
As of now, the all the music and audio saved on SoundCloud is safe. But the music streaming service will need to find ways to attract more subscribers and focus on increasing revenues via advertising.
SoundCloud is trying fight against big players such as Apple Music & Spofity. But, the only way it can do that is by focusing on areas and services that can’t be provided by both the players such as DJ sets, demos, indie music, miscellaneous audio and unofficial remixes. By focusing on these areas SoundCloud will either be a self-sufficient long-term survivor or it will attract a poacher.
We’ll have to wait and watch what the new team has in store for us. Until then, lets celebrate the fact that SoundCloud is there to stay!