SoundCloud prepare to sell for potentially $1 billion
The world’s top community-led music platform are reportedly preparing to sell this year for what could be in the billions.
SoundCloud, one of the world’s leading music streaming services and a favourite for independent artists, is gearing up for a sale. That’s according to a report from Sky News.
In their news article, 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 sale follows the success of SoundCloud’s new chief executive Eliah Seton. Seton took over last year, following the platforms struggle to turn a profit after years of attempting to monetise their business model.
The platform is famously free for musicians to upload to and for listeners to use. This has helped build a userbase of millions, however following investment from Raine and Temasek in 2017 the business was on the brink of collapse, needing to monetise it’s services rapidly.
SoundCloud begun 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% of it’s workforce to enhance profitability.
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 it’s first year of annual profitability 16 years since it launched, in mid-December.
It would appear that the two investment firms are looking to sell out of their investment whilst the service’s prospects are looking up. It comes at a turbulent time for the music industry, as streaming continues to struggle into profitability and AI poses an existential threat. We don’t yet know how interested parties will be, especially with a prospective price tag exceeding $1 billion.
A source told Sky that they didn’t expect the sale to begin for months yet to come.