Investors rescue embattled SoundCloud with $170 million lifeline

Enlarge  Alexander Ljung co-founder of SoundCloud will step aside

Enlarge Alexander Ljung co-founder of SoundCloud will step aside

Along with the new investment, Ljung will step out of the role of CEO which will go to Kerry Trainor, who is best known for his time at Vimeo as CEO.

The struggling audio-hosting startup SoundCloud has secured a financial lifeline, with two investors putting up nearly $170 million to help the company stay afloat, according to Billboard.

Ljung will continue to serve as chairman, and co-founder Eric Wahlforss will stay with SoundCloud as chief product officer. "We can't have that, and I'm happy to once again say that won't be happening", he continued.

As part of the investments, SoundCloud is adding talent from two former Vimeo executives. Atop all that, should this new investment close tomorrow, SoundCloud's pre-money valuation will have decreased a whopping 77 percent, from $640 million in 2014 to $150 million.

"SoundCloud is the largest open audio platform in the world", Trainor said. The company is also shifting its business strategy, to focus on selling more tools for artists, podcasters and other content creators to share material online. The company launched a subscription music service a year ago, but that didn't generate enough revenue to avoid last month's layoffs.

Nevertheless, the investments from the Raine Group and Temasek mean SoundCloud will stay independent. As I said, we're not going anywhere. But he said the drumbeat of articles, speculating about the "big gaping hole" that would be left in the music world should the service disappear, shows "people are very passionate about seeing it succeed". He said that SoundCloud is at the cusp of a turn-around, having invested years building out the technology platform and amassing a large user base. Total revenue has more than doubled to more than a $100 million annual run-rate this year. "I'm really excited about the next decade".

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