• Wednesday, April 17, 2024
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SoundCloud up for sale as COO, CFO prepare exit

SoundCloud up for sale as COO, CFO prepare exit

SoundCloud, a German music streaming platform, has been eyeing a sale and actively pursuing initiatives internally since the second half of 2022, according to Billboard. Meanwhile, Drew Wilson, COO and CFO of SoundCloud, is preparing to leave the company after nearly three years in the role, according to a staff memo obtained by Billboard.

According to Sky News on Sunday, SoundCloud is gearing up for a sale in 2024. Sky reports that they have learned of two investment banks readying a potential auction of SoundCloud. The American Raine Group and Singaporean state investment fund Temasek Holdings have been interviewing investment banks for a prospective auction later this year.

The potential sale follows the success of SoundCloud’s new chief executive, Eliah Seton. Seton took over last year after the platform struggled to turn a profit after years of attempting to monetise their business model.

SoundCloud began launching subscription services for both listeners and artists to enhance their offerings and create new revenue streams. With Seton taking the helm last year, the company cut 8 percent of its workforce to enhance profitability.

According to Billboard, SoundCloud’s leadership had previously considered the ambitious goal of reaching a $2.5 billion valuation for the company, with executives expressing optimism about signing artists who could generate major chart hits. However, the more realistic valuation target was commonly cited as around $1 billion.

Tracy Chan, Senior VP of Creator, emphasised a “billion-dollar-plus opportunity” at an all-hands meeting in 2022. Despite these aspirations, sources on Billboard indicate that most interest in SoundCloud’s valuation came from private equity firms rather than music companies. As of now, the company has not achieved the hoped-for major chart hits from its signed artists in 2022.

In December 2023, SoundCloud projected annual revenues of €288 million, up 7.% year on year. Music Business Worldwide revealed that SoundCloud was set to reach its first year of annual profitability in 16 years since it launched, in mid-December.