SoundCloud are allegedly going through a pretty rocky time at the moment. The streaming service are reportedly willing to sell the company for just $250 million and have been trying to raise $100 million for the past year, without success. They have also been in talks with potential buyers, including Twitter, Google and Spotify, but have been unable to close a deal.
Soundcloud are reportedly willing to sell for as little as $250 million – far lower than they were valued at a few years ago. But are they done just yet?
Back in 2014, investors valued the company at $700 million. However, as Recode reports, sources say that now the company is considering bids “as long as they’re above the total investment it has raised to date – about $250 million.”
This time last year, it was a whole different story. SoundCloud launched its subscription service SoundCloud Go in March 2016 and a few months later was rumoured to be looking to sell the company for a massive $1 billion.
However, it seems in the months since – despite multiple investments, including $70 million from Twitter – SoundCloud are still losing money. In January it was reported that they lost $52 million in 2015 and may “run out of cash” before the end of 2017.
A SoundCloud spokesperson has said the company is talking to potential investors and strategic partners. The spokesperson added that the conversations, led by new CFO Holly Lim, “reflect the market interest in our differentiated platform, unmatched user reach and strong outlook for 2017 and beyond.”
Despite their struggles, SoundCloud are still pushing their grassroots ethos of providing a platform for budding musicians to share and capitalise on their creative pursuits.
It was announced today that DJs and producers who upload mixes and remixes to the music-streaming service will now be able to monetise them for the first time, as revealed by Thump.
As of today, SoundCloud is expanding its invite-only revenue-sharing program to include artists who create “recorded and live sets, remixes, and other user-generated content.”
“This will be the first time we’ve invited DJs and producers who create remixes and sets on SoundCloud to start to be able to monetize and participate in the revenue that we’re generating through ads and subscriptions,” SoundCloud’s Chief Content Officer Stephen Bryan told Thump.
“Revenue that’s generated through ads and subscription payments by consumers is divided up and paid out based on how content is consumed,” Bryan said. Although he did not specify what exactly would determine how much artists will get paid, he said that payments are based on “share of engagement” and “listening time” – much like Spotify’s model.
SoundCloud have released a statement regarding the source article from Recode and have offered clarification on their current state of affairs:
“While we do not comment on rumours or speculation, we can say the latest Recode article doesn’t accurately portray the current state of the SoundCloud business,” reads the statement.
It continues: “We are actively speaking with a variety of potential investors and other strategic partners. These conversations, led by our recently appointed CFO Holly Lim, reflect the market interest in our differentiated platform, unmatched user reach and strong outlook for 2017 and beyond.”
“We expect to see 2.5x year-over-year revenue growth in 2017, driven in part by SoundCloud Go, our just-launched mid-priced consumer subscription.”[via FACT]