SoundCloud, the Berlin-based streaming audio platform, has secured a $70 million round of funding just as reports surfaced earlier this month that the popular service was unsuccessful in obtaining a $100 million round of funding.
In a statement obtained today by Billboard, SoundCloud announced it had secured a flexible $70 million credit line from Ares Capital, Kreos Capital and Davidson Technology. “This new funding,” the statement read, “will enable SoundCloud to strategically grow our technology and personnel resources to fuel our expected 2.5 times year-over-year growth in 2017, while building a financially sustainable platform on which our connected community of creators, listeners and curators can thrive for years to come.”
The story was first broken by UK Business Insider after it found documents filed with Companies House in the UK.
Founded in 2007 by Alexander Ljung and Eric Wahlforss, SoundCloud has raised over $193 million in six funding rounds, the latest led by Twitter, according to CrunchBase. The company claims to have 175 million monthly unique visitors, but that figure dates back to 2014 and has not been updated since.
SoundCloud launched its premium on-demand streaming service SoundCloud Go in March of last year, and a few months later was rumored to be seeking prospective buyers (Spotify and Google were mentioned). In late February of this year, it added a third tier that gives users ad-free access to millions of tracks for $4.99 a month.
Reports surfaced earlier this month on ReCode claiming the streaming platform’s inability to obtain funding would force it to sell for far lass than the “$700 million investors thought [SoundCloud] was worth a few years ago.” A more dire report in Financial Times from Feb. 13 quoted an anonymous “financier” as saying they “wouldn’t give [SoundCloud] any [money] right now… they need to rethink their valuation and settle for a [lower valued] round.” That story also reported that the company’s chief operating officer Marc Strigel and finance director Markus Harder had departed.
SoundCloud quickly hit back, calling FT’s report “disappointing and surprising for a newspaper of record.” And the company issued the following statement to Billboard: “While we do not comment on rumors or speculation, we can say the latest Recode article doesn’t accurately portray the current state of the SoundCloud business. We are actively speaking with a variety of potential investors and other strategic partners. These conversations, led by our recently appointed CFO Holly Lim, reflect the market interest in our differentiated platform, unmatched user reach and strong outlook for 2017 and beyond.”
The statement repeated today’s claim that the company expected to see a “2.5 time year-over-year revenue growth in 2017” which they attributed in part to SoundCloud Go.