SoundCloud’s Investors May Terminate The Service in 24 Hours
The end may be right around the corner for the music-streaming service, but a vote by shareholders could save SoundCloud.
Following persistent cash struggles and rumors that SoundCloud will be close to ending, news has emerged that the streaming service has secured new funding. The Raine Group and Singapore’s Temasek have swooped in to infuse some much-needed capital to the company. But that doesn’t seem like that is enough.
SoundCloud’s existing shareholders must accept a major reorganization or else the company will go the way of Limewire. A memo was sent out to shareholders by CEO Alexander Ljung, saying that if shareholders do not accept the reorganization proposal by the end of day, Friday, Aug. 11, then the streaming service “could cease to continue as a going concern.”
If they agree, SoundCloud receives its new investment to the tune of $169.5 million at a pre-money enterprise valuation of $150 million. This is a vast change from how SoundCloud was looked at by investors only a year ago. Once valued at about $700 million, the service laid off about 40 percent of its staff. Sure, Chance The Rapper stepped in to help save the company, saying he had a “fruitful call” with Ljung.
For my own personal sake, I am hoping that the proposal is accepted, and the cash infusion would help save the service. Even if the new investors would end up owning more than half of the Berlin-based firm.
We will keep our eyes on this as it continues to develop.