SoundCloud Saved By $170 Million Emergency Funding As CEO Steps Aside
Saturday August 12, 2017. 02:05 AM , from Slashdot/Apple
Last month, SoundCloud announced it was cutting about 40 percent of its staff in a cost-cutting move to help it compete against larger rivals like Spotify and Apple. One week after that announcement, TechCrunch published a report claiming 'the layoffs only saved the company enough money to have runway 'until Q4' -- which begins in just 80 days.' It now appears the company has closed the necessary funding round to keep itself afloat. TechCrunch reports: CEO Alex Ljung will step aside though remain chairman as former Vimeo CEO Kerry Trainor replaces him. Mike Weissman will become COO as SoundCloud co-founder and CTO Eric Wahlforss stays as chief product officer. New York investment bank Raine Group and Singapore's sovereign wealth fund Temasek have stepped in to lead the new Series F funding round of $169.5 million. SoundCloud declined to share the valuation or quantity of the new funding round. Yesterday, Axios reported the company was raising $169.5 million at a $150 million pre-money valuation. That's a steep decline in value from the $700 million it was valued at in previous funding rounds. The new Series F round supposedly gives Raine and Temasek liquidation preferences that override all previous investors, and the Series E investors are getting their preferences reduced by 40 percent. They're surely happy about that, but it's better than their investment vaporizing. Raine will get two board seats for bailing out SoundCloud, with partner and former music industry attorney Fred Davis, and the vice president who leads music investments, Joe Puthenveetil, taking those seats.
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