A MONTH AFTER POSTING HEAVY LOSSES, SOUNDCLOUD LOSES TWO TOP EXECS
(By TIM INGHAM | Published on February 12, 2017 for Music Business Worldwide)
SoundCloud has parted ways with its COO Marc Strigel and Finance Director Markus Harder.
The news comes five weeks after the Berlin-based company filed a fiscal report for 2015 showing annual revenues up 21.6% to $22m, but net losses accelerating 30.9% to $52m (Refer to chart below).
SoundCloud’s co-founder Alexander Ljung noted in the filing that the company may “run out of cash” before the end of 2017 if it cannot secure further financing.
In reaction to Strigel and Harder’s departure, a SoundCloud spokesperson told the Financial Times: “After five or so years, they felt it was time to move on to new adventures.”
The spokesperson added that the company is “currently out speaking to investors” while working with existing “external partners”.
The FT then quotes an anonymous German financier, who says: “SoundCloud is begging for money, but I wouldn’t give them any right now. They need to rethink their valuation and settle for a down round [at a lower valuation].”
MBW reported in January that Google was mulling a buyout of SoundCloud, but wasn’t prepared to meet the company’s own valuation.
The Alphabet-owned giant is willing to spend around $500m on SoundCloud, say our sources – half the $1bn price tag SoundCloud put on itself while attempting to sell to Spotify last year.
SoundCloud’s last funding round came in June last year, whenit raised $70m via investors including Twitter.