The proprietors of SoundCloud are gearing up to sell the popular streaming service for a sum exceeding $1 billion, as indicated by a recent report from Sky News.
Raine Group, a U.S. merchant bank, and Temasek Holdings, a state-backed Singaporean investment fund, both of which rescued SoundCloud from imminent collapse through their majority investment in 2017, are in the initial stages of exploring a potential auction for the Berlin-based company. The news, shared by Sky News’ Mark Kleinman on the X platform (formerly Twitter), suggests that the deal has the potential to surpass $1 billion, serving as a testament to the positive turnaround in the company’s fortunes since the appointment of CEO Eliah Seton last year. An inside source has informed Sky News that the sale is anticipated to be officially finalized later this year.
Established in 2007, SoundCloud has played host to over 320 million tracks from a staggering 40 million artists. Despite this vast catalog, the company has faced challenges in effectively monetizing its business model, grappling with the rapidly shifting dynamics of the global music industry.
In 2017, Raine Group and Temasek Holdings injected a crucial $170 million investment to stave off SoundCloud’s financial woes, representing more than half of the company’s $300 million valuation at the time. Subsequently, SoundCloud underwent two rounds of layoffs, slashing 20 percent of its workforce in 2022 and an additional 8 percent (approximately 40 staff members) in May 2023.
During the workforce reduction in 2023, CEO Eliah Seton characterized the move as “a challenging but essential decision” in an email obtained by Variety. He emphasized that the layoffs were part of a broader strategy aimed at achieving profitability for SoundCloud within the year.
Despite the ongoing developments, a spokesperson for SoundCloud purportedly declined to provide a comment in response to Sky News’ inquiries. The impending sale and potential shift in ownership mark a pivotal moment for SoundCloud, a platform that has played a significant role in the digital music landscape for over a decade.
