SoundCloud, the independent music streaming service reportedly on its deathbed, will live another day.
The Berlin-based company received a last-minute investment injection from two private equity firms, Raine Group and Temasek, to keep the once-thriving music platform alive. If SoundCloud did not receive the funding on Friday, the company faced imminent collapse as it ran out of cash.
The investment came with a major organizational change. CEO and founder Alex Ljung was replaced by former Vimeo CEO Kerry Trainor. Ljung will stay in the company as chairman of the board.
“I’m happy to announce that together with investors The Raine Group and Temasek we’ve just wrapped up the largest financing round in the history of SoundCloud,” wrote Ljung in a company blog post. “After a decade of balancing the roles of Founder, CEO and Chairman I’m excited to hand the CEO reins over to Kerry to allow me to fully focus on the role of the Chairman and the long-term.”
SoundCloud did not disclose the funding amount it received, but it is believed to around $169.5 million, according to an internal memo obtained by Axios on Thursday.
With the $169.5 million in cash, SoundCloud was also receiving $150 million pre-money valuation. The company at its peak was valued at $700 million.
The new investment reportedly gives Raine and Temasek liquidation preferences which override all previous investors, according to Techcrunch. Series E investors have seen their liquidation slashed by 40 percent.
Despite its reputation as a haven for independent musicians to release non-mainstream music, SoundCloud was unable to capitalize on its content. As subscription services like Spotify and Apple Music cornered the market, SoundCloud was squeezed out.
In July, SoundCloud laid off 40 percent of its workforce and closed down its London and San Francisco offices.
Photo: Chance The Rapper performs at the Surf Stage during 2017 Hangout Music Festival on May 21, 2017 in Gulf Shores, Alabama. (Photo by Frazer Harrison/Getty Images for Hangout Music Festival)