Music and audio streaming service SoundCloud says it has reached an agreement on a "significant investment" with merchant bank The Raine Group of New York and investment firm Temasek of Singapore.
Berlin-based SoundCloud didn`t disclose the financial terms but reports say it`s worth $170 million US.
As part of the deal, former Vimeo CEO Kerry Trainor becomes chief executive officer and another former Vimeo veteran Michael Weissman becomes chief operating officer. SoundCloud founders Alexander Ljung and Eric Wahlforss have agreed to step aside but will remain with the company — Ljung as chairman of the board and Wahlforss as chief product officer.
Cuts and closures
In July, SoundCloud laid off 40 per cent of its employees and closed two offices to focus on Berlin and New York, Reuters reported. A report surfaced shortly afterward speculating the company may not have enough funds to see it through the summer. A company spokeswoman refuted that report, adding that it was "fully funded until the fourth quarter" of this year.
The company said in a blog post Friday the investment "will ensure a strong, independent future for SoundCloud, funding deeper development and marketing of its core tools" used by millions of musicians, DJs, producers, labels, managers and podcasters.
"Now in its 10th year, I'm proud to say SoundCloud stands as an indispensable part of global music culture," Ljung said in the release. "I look forward to fully dedicating my time to leading the board and helping drive SoundCloud's long term strategic vision, and forging strategic partnerships and connections with industry partners and our one-of-a-kind creative community."
Trainor, who has 20 years of experience building and leading music and video streaming products, said, "I'm very excited to join this talented team and build the next chapter of growth around SoundCloud's mission to empower audio creators. I look forward to sharing more about our plan and path forward in the months ahead."
Aaron Brophy, a Toronto freelance music writer, said SoundCloud is a useful tool in the music industry, and users — artists, musicians, music fans and podcasters — will be relieved to hear it's in a better financial position.
"That's a whole ecosystem that if SoundCloud was in trouble there`d be literally thousands of podcasts that would suffer," Brophy said. "It`s very reassuring they`re getting more money because anyone who likes podcasts or produces podcasts and uses that as a service, they would have concerns."