SoundCloud, a favorite internet music streaming service for many, has been in the news quite a bit lately, and not always for the right reason.
As the music world changes and welcomes new companies, some that have been around for quite some time are being forced to change or go out of business. Spotify, Apple and Beatport have all had to make changes over the last few years and SoundCloud has even had to consider selling. It introduced a paid-subscription service to stay in business and there were reports suggesting that Spotify was considering purchasing the company. After Spotify backed out, Google recently came out as a potential buyer.
Even with all these new possibilities, the site is still reeling from a 2015 fiscal year that, despite a 21.6% ($22.3 million) increase in gross revenue, saw the company have a net loss of 30.9% or $54.3 million, according to a report by the UK’s Company House. The company’s co-founder, Alexander Ljung, released a statement saying they were reliant on the new paid-subscription service and that they may run out of cash sooner than expected:
“The assumption of a successful launch of the new subscription service is the key element of [our] financial projections for the next three years. Whilst the directors believe that the Group will have sufficient funds to continue to meet its liabilities through 31 December 2017, the risks and uncertainties may cause the company to run out of cash earlier than that date, and would require the Group to raise additional funds which are not currently planned. These matters give rise to a material uncertainty about the Group’s ability to continue as a going concern.”
Be sure to check back for updates surrounding SoundCloud and Google’s potential acquisition of the struggling company.
H/T: Mixmag
