SoundCloud Seeks Buyer At USD One Billion Price Tag | TechTree.com

SoundCloud Seeks Buyer At USD One Billion Price Tag

Music streaming company strikes a discordant note where a growing user base isn’t translating into higher revenues

 

The digital music streaming business appeared to be on song. Apple Music planned a major retune. Rivals Spotify, Tidal and Pandora began experiments to strike a different beat. And, then came the discordant note – that SoundCloud is up for sale – or is looking for strategic investments or partnerships.

Put in simple words, the verdict is out that the German music streaming company is out of cash and possibly of ideas on how to start making some money from the business. Published media reports said SoundCloud was exploring “strategic options”, including a possible sale at a price tag of a billion US dollars.

The company, founded eight years ago in Stockholm and later shifted to Berlin, began as a platform that allowed musicians to share their recordings but later took on the role of a full fledged publishing platform that allowed singers and other performers to distribute their music tracks.

A Bloomberg report, quoting people familiar with the goings on, said the founders and the investors were exploring options that included sale of the company. The founders, Alexander Ljung and Eric Wahlforss, are reportedly keen on selling the company, which currently boasts 175 million users.

The company, which managed to raise approximately USD 100 million dollars by way of investments from various sources, has been struggling to negotiate deals with major music labels. Despite growing its user base at 1.5 million a month and adding 12 hours of music each minute, monetization remained low.

As part of its efforts to bolster revenues, SoundCloud introduced a premium service earlier this year that allowed customers to pay 10 dollars a month for ad-free streaming and provided them increased access to albums. This was considered a possible game-changer as rivals like Apple and Spotify preferred to stick with a more mainstream model.

Media reports said that SoundCloud had reported USD 19 million as revenue from sales for 2014, the last year when they went public with their accounts. The operating losses during this period stood at a whopping USD 43 million dollars.

With such numbers, it would indeed be a miracle if SoundCloud managed to find an investor who would splurge a billion dollars for the company. Even Twitter, which committed to an investment of USD 100 million for SoundCloud had valued it only at USD 700 million.

The note sure is sounding discordant and the future appears cloudy indeed! 


TAGS: SoundCloud, Apple Music

 
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