One source familiar with the investment said it amounted to around $170 million (144 million euros), as reported on Thursday by online news site Axios, which had obtained the deal's term sheet. While many were concerned, it turns out that a shift in CEO's and new investors will keep Soundcloud's services alive and well. It turns out that, without a massive parent company like Google, it's quite hard for streaming services to turn a profit - especially when your CEO is too busy partying to pay attention. SoundCloud's previous valuation was $700 million. A spokeswoman for SoundCloud said last month it remained fully funded into the fourth quarter, while declining to comment on what lay beyond.
In addition, co-founder Alex Ljung will be stepping down as CEO, but remaining chairman.
SoundCloud was set up in 2007, as a way for unsigned musicians to upload and share their music with others. Instead, he confirmed today, Kerry Trainor will be assuming the chief executive position, supported by Mike Weissman who will now be SoundCloud's COO.
Now, according to the U.S. news and information website Axios' Dan Primack, a circular has been sent to existing SoundCloud shareholders, which requires them to accept or reject a reorganisation proposal by the end of the day. Participants included The Raine Group and Temasek.
Along with the investment news, SoundCloud also announced some changes in leadership.
Soundcloud is now operating with a total revenue at a $100 million annual run-rate, but is still yet to break even.
Trainor, who has 20 years of experience building and leading music and video streaming products, said, "I'm very excited to join this talented team and build the next chapter of growth around SoundCloud's mission to empower audio creators".
SoundCloud and the uploads of its many rappers, producers, noise bands and nascent podcasts are safe, for now.
The Raine Group is a global merchant bank focused exclusively on technology, media, and telecommunications.