SoundCloud Accepts $170 Million Rescue, Taps New CEO

SoundCloud Accepts $170 Million Rescue, Taps New CEO

The company outlined the investments in a blog post, while it also announced that former Vimeo executive Kerry Trainor will be taking over as CEO...

SoundCloud founder and former CEO Alexander Ljung had agreed to step aside to become chairman of the board, it said.

Speaking to Billboard, Trainor highlighted plans to develop a "robust creative toolkit" for SoundCloud's Unlimited service in hopes of attracting more musicians to pay for its most expensive subscription.

That's the approach Trainor used at Vimeo: charging filmmakers to use its video-sharing, marketing and analytics tools. The company launched a subscription music service a year ago, but that didn't generate enough revenue to avoid last month's layoffs. "SoundCloud can do more". Co-founder Eric Wahlforss will be chief product officer. The Pro service, which costs $7 a month, provides basic stats such as play counts and likes, see plays by country, turn on or off public comments and upload up to six hours of audio.

Most of the content available on SoundCloud is free and efforts to introduce paid tiers didn't take off with customers.

Nevertheless, the investments from the Raine Group and Temasek mean SoundCloud will stay independent. We can't have that, and I'm happy to once again say that won't be happening.

One source familiar with the investment said it amounted to around US$170mil, as reported last Thursday by online news site Axios, which had obtained the deal's term sheet. As I said, we're not going anywhere.

The decision to lay off so many talented colleagues was "very painful", Ljung said, but that it was the right thing to do to ensure the future independence of SoundCloud. Total revenue has more than doubled to more than a $100 million annual run-rate this year.

"SoundCloud, just like music, will continue to evolve, but importantly, both will always be a key part of life", Ljung said.