Soundcloud saved by $170 million investment
Soundcloud has been saved! (For now.) The online music platform had to close two of their offices, lay off 40% of their staff, and they were in need of new investors in order to survive. Today they officially took new funding from The Raine Group and Temasek, who teamed up to make a $169.5 million investment in Soundcloud. Former Vimeo CEO Kerry Trainor is also taking over as CEO, with founder Alex Ljung stepping down, and former Vimeo executive Michael Weissman will now be Soundcloud's chief operating officer. Billboard reports:
"All of this together -- the capital, the capital partners -- with Kerry and Mike joining our team -- it puts our company in a really great position to stay strong and remain independent," Ljung said in an interview with Billboard. "We see a strong, independent future for the company."
Ljung and SoundCloud co-founder Eric Wahlforss will remain with the company they founded a decade ago. Ljung will serve as chairman of SoundCloud's board, and Wahlforss as chief product officer.
Trainor told Billboard his experience running Vimeo -- a platform created by filmmakers to share and monetize their videos -- would inform his work at SoundCloud, as he places greater emphasis on developing tools for musicians, DJs and other creators.
...Raine partner Fred Davis, a former music industry attorney who represented several top acts before entering investment banking, including Kanye West and the Black Eyed Peas, said artists feel a fierce loyalty to SoundCloud -- and worry about its fate.
"If I could show to you the number of people who have been calling us, expressing fear about it going away, you would be shocked," said Davis, who will join SoundCloud's board.
This tight connection with the artist community, together with SoundCloud's collection of original recordings and evolving works, attracted Raine's investment, despite the recent layoff of 40 percent of its workforce and speculation that it would run out of money by the end of the year.
"It's crystal clear to us that what SoundCloud has that is truly unique to its service is a unique set of rights and content that are available to listeners," said Davis.