If all goes to plan, SoundCloud’s owners could offload it for a cool $1 billion.
SoundCloud was in dire straits before The Raine Group and Temasek Holdings acquired it in 2017. The two investment banks initially raised $170 million to keep the lights on — and after untold expenses pushing it to its first year of profitability, they’re apparently in talks to sell it for $1 billion.
Writing for Sky News, Mark Kleinman reported that Raine and Temasek have begun courting other investment banks to take the streaming service off their hands. Citing insiders, he dismissed the likelihood of the sale going through until “some months” have passed. SoundCloud reportedly declined to comment.
SoundCloud’s road to solvency has been anything but linear. Founded in 2007, the company gained traction during the EDM boom as a new generation of content creators sought out a platform to host their music with no barrier of entry. Ten years later, the company ran out of financial runway and was forced to lay off 40% of its staff.
When Raine and Temasek came to the rescue, SoundCloud Co-Founder Alex Ljung stepped down to make room for former Vimeo CEO Kerry Trainor to take the helm. Mike Weissman took his place in 2020, and after introducing hardware integrations as well as a fan-powered royalty model, the company forecast that 2023 would mark its first profitable year.
It has come at no small cost. In 2022 and 2023, SoundCloud laid off 20% and 8% of its staff, respectively. It is not the only company in the music streaming landscape forced to navigate such obstacles, to be sure. Spotify ended 2023 with the announcement that it would lay off 17% of its staff.
Kleinman’s report makes no mention of which investment firms might be considering the SoundCloud purchase. EDM Identity will share more information as it becomes available.