{"id":4300,"date":"2017-03-23T19:08:12","date_gmt":"2017-03-23T19:08:12","guid":{"rendered":"https:\/\/www.rsoftsolution.com\/blog\/soundcloud-confirms-new-70m-credit-line-after-failing-to-close-100m-round.html"},"modified":"2017-03-23T19:08:12","modified_gmt":"2017-03-23T19:08:12","slug":"soundcloud-confirms-new-70m-credit-line-after-failing-to-close-100m-round","status":"publish","type":"post","link":"https:\/\/www.rbsitsoftwaresolution.in\/blog\/soundcloud-confirms-new-70m-credit-line-after-failing-to-close-100m-round.html","title":{"rendered":"Soundcloud confirms new $70M credit line after failing to close $100M round"},"content":{"rendered":"


\n<\/p>\n

Soundcloud<\/a> \u2014 the popular, but unprofitable platform that lets creators\u00a0post and share music and other audio files \u2014 may have been unsuccessful<\/a> (so far) in closing a new $100 million round of funding, but it\u2019s not running out of money soon. The company has secured\u00a0a $70 million round of debt funding from three new investors \u2014 Ares Capital, Kreos Capital, and Davidson Technology \u2014 which it will use to build out more technology, to hire more people, and to build \u201ca financially sustainable platform.\u201d<\/p>\n

Soundcloud confirmed the debt round to us in a statement, after the funding was first uncovered by BI<\/a> after it noticed a\u00a0company\u00a0filing earlier this week at Companies House, the UK company registrar.<\/p>\n

\u201cWe are pleased to have secured a flexible $70 million credit line from Ares Capital, Kreos Capital and Davidson Technology\u00a0that is ideally structured for a company with our strong credit rating and in our stage of growth,\u201d a spokesperson for the\u00a0company said in a statement. \u201cThis\u00a0new funding will enable SoundCloud to strategically grow our technology and personnel resources\u00a0to fuel our expected 2.5 times year-over-year growth in 2017, while building a financially sustainable platform on which our connected community of creators, listeners and curators can thrive for years to come.\u201d<\/p>\n

We\u2019ve asked for comment on what is happening with that $100 million round as well as the valuation of the company. (Previous investors include Atlantic Labs, Doughty Hanson, Eniac Ventures, GGV, Index, IVP, Kleiner Perkins Caufield Byers and Tennenbaum Capital Partners \u2014 which funded a previous debt round of $35 million<\/a>\u00a0\u2014 and Twitter \u2014 which invested $70 million in June 2016<\/a>.<\/p>\n

The $70 million credit line secured earlier this month and confirmed today brings the total raised by the company to $320 million. An equity round of $60 million in 2014 put the company\u2019s valuation\u00a0at $700 million<\/a>, where it has remained even as it has raised more money.<\/p>\n

Soundcloud is sometimes dubbed the \u201cYouTube for audio\u201d because of its emphasis on user-generated content and focus on providing a platform for creators to distribute their work as much as it is a place for consumers to discover it.<\/p>\n

Today, it hosts\u00a0around 150 million music tracks plus other audio on its platform, which has 175 million listeners, counting\u00a0both its free and paid users.\u00a0(It has never broken out just how many of its users\u00a0have opted for its premium tiers, which were introduced last year and are regularly tweaked with new prices and options<\/a>.)<\/p>\n

Soundcloud has also been on a rollercoaster business-wise. At least two potential acquisitions \u2014 by\u00a0Twitter<\/a> and\u00a0Spotify<\/a> \u2014 have fallen\u00a0apart because\u00a0of Soundcloud\u2019s asking price<\/a>\u00a0and\u00a0other priorities<\/a>\u00a0at the acquiring companies.<\/p>\n

And there is the issue of its finances. Soundcloud was founded by Swedish entrepreneurs Alexander Ljung and Eric Wahlforss out of Berlin and has offices in New York, but its business is registered in the UK. So regular, annual filings at the UK\u2019s Companies House have consistently spelled out the company\u2019s red<\/a> financial picture.<\/p>\n

In the last report that came out in February<\/a>, covering the company\u2019s financials in fiscal year 2015, Soundcloud\u00a0reported losses of \u20ac51.22 million ($55 million in today\u2019s currency), up 30 percent on the year before on revenues of \u20ac21.1 million.<\/p>\n

Doing the math, using Soundcloud\u2019s projected revenue growth, that revenue figure should rise to \u20ac52.75 million ($56.88 million) this year. It\u2019s going in the right direction, but the question is how long it will take before Soundcloud can justify the value that has been placed on it, and the investment that has been made in it.<\/p>\n

As with previous filings<\/a>, the annual report from February also noted that the company theoretically had financial runway (in this latest case, until December 2017), but that \u201crisks and uncertainties may cause the company to run out of cash earlier than that date, and would require the Group to raise additional funds which are not currently planned.\u201d<\/p>\n

Hence the debt round announced today.\u00a0The filing for the debt round<\/a>\u00a0(link to document here<\/a>) does not detail the payment terms of the debt. These can often be made at far stricter terms than equity investments from VCs, which would have been one reason why Soundcloud might have tried to raise an equity round instead.<\/p>\n

<\/p>\n

Article source: http:\/\/feedproxy.google.com\/~r\/techcrunch\/social\/~3\/1PaYDZRlBvs\/<\/p>","protected":false},"excerpt":{"rendered":"

Soundcloud \u2014 the popular, but unprofitable platform that lets creators\u00a0post and share music and other audio files \u2014 may have been unsuccessful (so far) in closing a new $100 million <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[3],"tags":[10,7,14,15,6,12,11],"class_list":["post-4300","post","type-post","status-publish","format-standard","hentry","category-latest-update","tag-computer-news","tag-downloads","tag-microsoft-download-news","tag-networking-updates","tag-technology-update","tag-wordpress-plugin-download","tag-wordpress-theme-download"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t