Soundcloud has been struggling financially to stay floating in the business. It was reported that the music streaming service was able to get a "substantial" amount of investment to keep the company afloat. Though it would still be a tough struggle for corporate existence, SoundCloud claimed that they see a strong and independent future for the company.
The $170 Million investment
It was revealed last Friday that SoundCloud was able to receive funds amounting to $170 Million through a media-focused investment bank Raine Group of New York and Singapore's Temasek.
One of the disclosed terms that the investors asked is to remove the SoundCloud founder and CEO Alexander Ljung to step down his position. Ljung agreed, and he will be replaced by the former Vimeo leader Kerry Trainor together with Mike Weissman as the COO.
"All of this together — the capital, the capital partners — with Kerry and Mike joining our team — it puts our company in a great position to stay strong and remain independent," Ljung tells Billboard. Ljung will still be a part of the SoundCloud team as a Chairman and will focus on the long-term goals of the company.
Future plans
SoundCloud's future plan is to strengthen the one thing that gives them sales: the subscription sales. In order to attract more subscribers for their upper-tier services, Trainor has said on his interview with Billboard that the company will focus on developing "robust creative toolkit." By improving their tools, it can make more music creators subscribe to their plans to use their advanced toolkits.
More funds will also be allocated for the marketing of these tools. The primary target market of the music streaming company are the audio creators which consists of musicians, DJ's, labels, podcasters, and producers. The company's another goal is to double its revenue to $100 million over the next year. We don't still know if they can make it, but with the newest funding, which is said to be the largest financing round in the history of SoundCloud, things are possible.
There are still tens of millions of users that use SoundCloud's services, and it is able to compete with its rivals.
The cash shortage
Just last July, SoundCloud dismissed 40 percent of its employees and closed the London and San Francisco offices. The company now focuses its operations on Berlin and New York. The company is still fully funded until the fourth quarter. Thanks to the new investment, SoundCloud was able to stay on the game and avoid potentially running out of cash later this year.
