SoundCloud, the music upload and sharing site popular with many independent artists may not die after all. It’s being reported that a pair of investment funds – The Raine Group and Temasek Holdings – have swooped in to acquire large stakes in the company. But some say the new deals have left some who use the platform concerned about it’s future.
The investments helped to stave off financial ruin for the company, but now two finance houses have effectively taken control of the company. And it doesn’t need to be mentioned what happens when money controls the music. However, the company wasn’t even thought to last into the second half of 2017, so the investment is welcome news to many.
SoundCloud is now valued at $300 Million, much lower than earlier valuations. For instance, in 2014 the company tried to sell to Twitter for $1 Billion.
According to Music Business Worldwide:
Now, in the eyes of one senior music industry source, SoundCloud is “on the verge of insolvency” – and needs to be rescued.
“SoundCloud plays a unique role in the industry and it’s a great shame that it’s [in this financial state],” said the source, who is close to the company’s situation.
“It’s not like Private Equity will be looking at this deal as a way to contribute to the music industry; they’re unlikely to be thinking about how they can serve artists and songwriters.
“[This investment] is a shot of steroids in order to make some quick money – it’s not about the long-term health of the music business.”
Last month SoundCloud had to let go of 40% of it’s work force and close it’s London and San Francisco offices.
What’s in store for the future of SoundCloud? It will be interesting to see.