SoundCloud Mulling Billion Dollar Sale

Go should help SoundCloud financially, provided it can actually convert its freemium users into paid subscribers. Earlier this year, the company released its financials from 2014 which showed a service growing rapidly and burning through piles of cash, spending $63.8 million to generate $19.7 million in revenue. Since then, SoundCloud raised $77 million in funding in 2015, as well as the $100 million funding round in June which valued the company at $700 million, according to Bloomberg.

However, one source doubts that SoundCloud will be able to find a buyer at its $1 billion asking price, or whether the company would actually go through with a sale at all, suggesting that the $1 billion number is more about gauging the market's valuation of the company rather than any concrete plans. One concern from investors is the subscription service's conversion rate, which an insider estimates has only brought subscribers in the "tens of thousands" over its first four months; by comparison, Spotify has said its conversion rate hovers between 25-30 percent. Six months after their respective launches, Apple Music and Tidal had attracted 10 million and one million subscribers (though Tidal started with around 500,000 at the time of its March 2015 U.S. re-launch.) Reps for SoundCloud declined to comment.

SoundCloud was founded in 2007 by Swedish-born Alexander Ljung and Eric Walforss, who currently operate as its CEO and CTO, respectively. But with the arrival of Deezer in America, the pending launch of a Pandora on-demand offering and the much-discussed potential subscription service from Vevo in the offing, the streaming world is getting bigger by the week.