The company will now be led by CEO Kerry Trainor and Chief Operating Officer Michael Weissman, both of whom held similar roles at Vimeo, a video-sharing site that is a subsidiary of IAC. This financing means SoundCloud remains strong, independent and here to stay. Axios says CEO Alexander Ljung infers in the memo that if the proposal is rejected, SoundCloud's ability to continue would "not be a going concern".
Trainor plans to emphasize developing tools for musicians, DJs and other creators to use on SoundCloud, as he did with video creators on Vimeo by charging subscribers to use the video-sharing, marketing and analytics tools. Atop all that, should this new investment close tomorrow, SoundCloud's pre-money valuation will have decreased a whopping 77 percent, from $640 million in 2014 to $150 million.
The past year has seen the world's largest audio library SoundCloud battle to stay afloat in the market, but the future of the streaming platform seems secure, at least for now, thanks to a new investment deal.
SoundCloud spent years negotiating with record labels to build a $9.99 per month subscription service to match Spotify and Apple, but the resulting product hasn't gained traction. "Millions of creators choose these tools to share their work with the world - that will remain at the focus and center of the company".
"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.
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.