The drama that is the future of SoundCloud seems to be heading to a pivital moment. In July the music streaming platform shed 3 percent of staff (143 workers) and closed its London and San Francisco office.
After TechCrunch reported that the company was almost out of cash, co-founder and CEO Alexander Ljung took to the company’s blog and declared, “There’s an insane amount of noise about SoundCloud in the world right now. And it’s just that, noise. The music you love on SoundCloud isn’t going away, the music you shared or uploaded isn’t going away, because SoundCloud is not going away. Not in 50 days, not in 80 days or anytime in the foreseeable future. Your music is safe…. SoundCloud is here to stay.”
But according to a memo sent to shareholders by Ljung, and published by Axios, if shareholders don’t accept the reorganization proposal by the end of Friday, the streaming service could cease to “continue as a going concern.” If they agree, Soundcloud gets its new investment: $169.5 million at a pre-money enterprise valuation of $150 million.
According to the memo, “Financing of this size will enable to Company to pay off its remaining debt, while ensuring a strong, independent future… In the event that the transaction does not close and in the vent SoundCloud does not otherwise obtain additional funding, based on current cashflow forecasts, SoundCloud faces liquidity concerns in the near term.”
More on this story as it develops.
UPDATE [August 12] SoundCloud has secured financing in order to stay afloat, according to a blog post on the company’s website. CEO Alex Ljung will step aside though remain chairman as former Vimeo CEO Kerry Trainor replaces him. Mike Weissman will become COO as SoundCloud co-founder and CTO Eric Wahlforss stays as chief product officer. New York investment bank Raine Group and Singapore’s sovereign wealth fund Temasek have stepped in to lead the new Series F funding round of $169.5 million.