Can SoundCloud weather this storm? The Berlin-based streaming audio platform is reportedly running out of money, and with recent efforts to raise capital coming up short, may consider selling for far less than what it was valued at just three years ago.
According to Recode, SoundCloud has been trying to raise more than $100 million since last summer, meaning right after it launched an on-demand streaming service to compete with Spotify and others. Sources say the company "may sell for less than the $700 million investors thought it was worth a few years ago" and that it will consider bids "as long as they’re above the total investment it has raised to date -- about $250 million."
That a startup like SoundCloud is seeking funds should come as no surprise to anyone familiar with the company -- in January, one of its co-founders warned in a filing that "risks and uncertainties may cause the company to run out of cash" before the end of the year, opening the possibility of new funding rounds at any time.