UPDATE: Two Top Execs Exit As SoundCloud “Begs” Investors For Cash
UPDATED: SoundCloud's COO and VP of Finance both have left the music streamer. Their exit comes just weeks after the company admitted in financial filings that it could run out of cash in 2017 and amidst a new report that it's "begging" investors to help.
Chief Operating Officer Marc Strigel and Vice President of Finance Markus Harder have both left their positions at SoundCloud, the music streamer confirmed to the Financial Times. They joined the company in 2011 and 2012 respectively.
In January, UK financial filings showed that SoundCloud's net losses had accelerated 31% to $52 million in 2015, even as revenue grew 21.6% to $22 million. All of this was prior to the launch of its paid streaming platform, which while offering new revenue opportunities, also brings growing payments to labels and artists.
In those filings, SoundCloud co-founder Alexander Ljung wrote (bold added):
“Whilst the directors believe that the Group will have sufficient funds to continue to meet its liabilities through 31 December 2017, the risks 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.
“These matters give rise to a material uncertainty about the Group’s ability to continue as a going concern.”
"Begging For Money"
Last summer, SoundCloud raised $100 million including $70 million from Twitter. It’s now desperately in search of a buyer or new investment. “SoundCloud is begging for money, but I wouldn’t give them any right now”, one German financier told the Financial Times. “They need to rethink their valuation and settle for a down round”.
To date, SoundCloud has raised $193.32 million in 6 Rounds from 10 Investors. It is actively for sale, with Google rumored to be the latest company somewhat interested. Twitter eyed SoundCloud, but chose to invest instead, and a flirtation with Spotify ended after that company decided that it should not take on additional obligations prior to its own IPO.