TURBULENCE AT SOUNDCLOUD!
BY: SARA ALYA
SoundCloud has not had a great couple of months and it doesn’t seem like their start to 2017 is any better…
Two key senior executives have decided to walk away from the Berlin-based streaming service “to move on to new adventures”, a company spokesperson told the Financial Times. Marc Strigel and Markus Harder, SoundCloud’s Chief Operating Officer and Finance Director have decided to jump ship amid deep concerns over potential bankruptcy.
Read 'soundcloud on the brink of bankruptcy' https://www.youngmusicboss.com/news/2017/1/6/soundcloud-on-the-verge-of-bankruptcy
Contrary to this and sounding quite unaffected, a spokesperson for the company said “SoundCloud is currently fundraising, which is typical of most start-ups of our size and in our phase of growth. [These exits are] unrelated to our ‘normal course’ fundraising efforts, which are being led by our recently appointed Chief Financial Officer, Holly Lim.” She continued with “SoundCloud remains in a position of strength and is confident in its long-term prospects as it continues to be the go-to platform for the creative community.”
Unfortunately, recent events could imply quite the opposite.
One of Europe’s hottest start-ups, SoundCloud, has approximately 200m members and 135m tracks, and was last valued at about $700m. An average of 12 hours of music is uploaded to the site by creatives every minute. It was reported that the firm raised approximately $100m last June from a group of investors, including Twitter INC.
Despite being a popular platform, Spotify still made the choice to drop out of major talks to take over last year. It was reported that they feared the acquisition could negatively impact Spotify’s IPO in the future.
Recently filed accounts at Companies House in the UK reported a $51m loss in 2015; an increase of 20% from 2014, making it clear that funding is crucial at present.
SoundCloud recently launched Go, their new subscription service, in an effort to “monetise the platform”. The directors recognised the risks of launching such a service threatened SoundCloud’s “ability to grow further and could require additional funds which have not yet been agreed.” Whether free user to subscriber conversion rates will grow to significant levels remains to be seen.
Let’s hope SoundCloud weather the storm and come out of the other side strong, as they remain a powerful tool that young, new musicians all over the world use to get their music heard.
Source: Financial Times