SoundCloud will reportedly lose money every year until 2020
Just when you thought the drama was over regarding SoundCloud’s extensive business history, it starts right back up again. Back in early August, there was a report by Music Business Worldwide stating that two angel investors came together to purchase a controlling stake in SoundCloud for an astounding $150 million at a $300 million total valuation mark. This came just after the company was rumored to be going bankrupt by the end of the summer after laying off nearly half of their global employees and closing two main offices in the United States.
Now, multiple leaked documents that were filed with German regulators just a few weeks ago show some interesting news that may make you uneasy if you’re already concerned about the platform’s future. The documents state that SoundCloud will lose money continually for the next three years until 2020 hits.
“The Group has made progress in improving their music platform by signing license deals with several large and small record companies, publishers, labels as well as independent artists,” the filing states. “The Group expects to sign up further music companies as well as other rights holders and increase its investment in its music platform. The group has launched a user subscription service in the US and expect to launch of the user subscription service across various geographies, such as the UK, Ireland and France. The Group is currently loss making and the Group’s business plan for the next three years forecasts that this will continue for the foreseeable future.”
It is clear that the two angel investors’ money influx will not be enough to immediately pull SoundCloud out of the deep hole they have dug themselves in over the last few years. The CEO of European streaming service Deezer was reportedly interested in taking over Soundcloud completely but it remains unclear at the moment whether or not that has any real traction to it.
You can read the full report on the leaked documents here.