SoundCloud is perhaps one of the only music companies that has something different going on for it, with its inclusion of user generated content as opposed to other players in the field like Spotify. However, the company has seen its fair share of up and downs and truth be told, it pales in comparison to the competition. Thus, when a major investment came for it in the form of a $75 million funding from Pandora owned SiriusXM, it took the opportunity with open arms. Pandora has an ad partnership with SoundCloud in which Pandora re-sells SoundCloud’s inventory on its programmatic platform.
The company plans on using this investment for product development and launching new services, and pour it all on expansion, as it needs to grow before it is ready to be in the league of industry giants like Spotify. However, the company just hit forward revenue run-rate of $200 million for the first time in the fourth quarter of 2019, signifying growth and potential. Good numbers like these also warrant a high valuation for the appraisal round for the company which was last valued at $500 million in 2017.
The company, having raised $404 million to date, still struggles from the licensing deals and agreements that have to be surmounted to become as huge as Spotify, however, its feature of letting users upload their own content to the platform has kept hopes alive, even in the midst of potential talks of acquisition from Twitter and later Spotify, not giving in and still breathing to this day. The $75 million investment and the combined 100 million users of SoundCloud and SiriusXM might give the push that the company so desperately needs.
“SoundCloud’s three consecutive years of strong financial performance directly reflect the success of our creator-led growth strategy,” said Kerry Trainor, current CEO of SoundCloud, in a statement. The statement and the deal show signs of improvement for the company which once almost ran out of money and was saved by a total revamp of operations and major layoffs, including those of founder, Alex Ljung, stepping down as CEO.
Platforms like these can bear unexpected fruits with the use of consumer participation, as many like Justin Bieber were discovered online themselves. It is yet to see how this $75 million investment pans out for the company, which is still struggling.