Soundcloud survives another day.
The online streaming service hasn’t released any revenue figures since 2013, but at the time, it was hemorrhaging around $15 million a year. The service relies on outside investors, reportedly receiving $60 million in January 2014.
According to Swedish news site Digital, Soundcloud just received another approximately $35 million in funding with Tennenbaum Capital Partners, and they have “an option to borrow another [~ $70 million USD] through convertible bonds.”
DiGITAL noted that the loan implied “SoundCloud had trouble getting new financing otherwise” and that the company could be seeking a sale — and thus does not want to further dilute its shares.
A Soundcloud spokesperson said, “It’s an attractive option for companies like SoundCloud that have a solid credit rating, and offers an appropriate funding option for a company at our growth stage.”
Soundcloud has one of the most consistent userbases, even compared to Spotify, with over 150 million registered users. It boasts one of the greatest communities for music curation and discovery of all the streaming platforms, meaning that it’s extremely popular with younger generations looking for a fresh sound.
However, after dealing with major labels like Sony and Warner, it has been difficult for Soundcloud to completely monetize the platform. It has had to rely on outside investors to stay afloat while it attempts to find a way to turn a profit. Though, that issue is not limited to just Soundcloud – other streaming platforms that you would think more successful rarely turn a profit due to licensing and royalties that need to be paid out, along with payroll and other miscellaneous expenditures.
For the time being, Soundcloud remains afloat.
via Tech Crunch
