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SoundCloud Gains Funding, Loses CEO

Embattled music streaming service SoundCloud has finally secured the funding necessary to solve its impending debt crisis.

“This financing means SoundCloud remains strong & independent. As I said, SoundCloud is here to stay”, said outgoing CEO Alex Ljung in a blog post.

Ljung will be stepping down from the role, with former Vimeo CEO Kerry Trainor set to take the reins.

Fellow Vimeo-alumni Mike Weissman is also set to join the company as COO.

Ljung says that “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.”

He says the $169.5 million investment is the largest financing round in the history of SoundCloud

“This, I know, sets us up as an even greater team  for the decade(s) to come,” he added.

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.

“Millions of creators choose these tools to share their work with the world,” said Trainor, “[and] that will remain at the focus and center of the company.”

As reported last week, the company is said to have circulated a ‘do-or-die’ reorganisation proposal to shareholders in order to secure funding from boutique merchant bank The Raine Group and Singapore’s state investment firm Temasek.

However, the lifeline does come with a catch for investors. As part of the reorganisation, The Raine Group, Temasek and a number of returning backers will receive a special class of common stock that has seniority and preference over the company’s other investors.

Whether or not this detail is compatible with SoundCloud’s reputation as an “independent” and artist-driven player in the music streaming space remains to be seen.

The move comes following SoundCloud’s prior efforts to regain profitability by cutting 40% of its global staff several weeks ago.

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