SoundCloud, the struggling streaming service on the verge of shutting down, has been saved by a multi-million dollar investment and a shakeup in its executive ranks. But with the new cash influx, will the company — known as a bastion for emerging artists — have to contend with changes to its platform?
On Friday news broke that the company had managed to acquire $169.5 million in Series F funding to keep the streaming service afloat. It’s also bringing on former Vimeo CEO Kerry Trainor, who will replace Alex Ljung, although he will remain as a chairman of the company he founded. Mike Weissman, also a former COO at Vimeo, will become the COO at SoundCloud.
“After a decade of balancing the roles of Founder, CEO and Chairman I’m excited to hand the CEO reins over to Kerry to allow me to fully focus on the role of the Chairman and the long-term,” Ljung said in a statement.
With the massive cash infusion coming from an investment deal with Raine Group and Singapore’s Temasek, Variety reports the new investors will acquire more than 50 percent of the company.
What’s Next for SoundCloud?
It remains to be seen what direction that will take the streaming service, which will likely have to up its game in the paid subscribers department and find new ways to connect with music industry players.
According to Variety, the Raine Group investment is said to have been spearheaded by Fred Davis, a former EMI music exec and advisor to companies like Spotify, Shazam, and YouTube.
Contending with losses, SoundCloud laid off 40 percent of its staff in July. It was late out the gate at launching a paid service for listeners, debuting a relatively small catalogue compared to services like Spotify in 2016.
Courting major label support also proved challenging for the company; much of SoundCloud’s initial appeal was as a platform for remixes and mix tapes, and later copyright infringements notices and subsequent takedowns of music left a bad taste in the mouth of some indie uploaders.
With Trainor now at SoundCloud’s helm, the company could mimic Vimeo’s success by further championing the craft of independent creators, keeping the service doing what it does best. But balancing that approach with the interests (and cash incentives) of major labels and investors might be tough.