SoundCloud is exceeding financial and user growth targets less than a year after a $170 million financial rescue took it back from the brink of collapse.
Kerry Trainor, the former chief executive of Vimeo who pulled together a fundraising deal in August, says SoundCloud made sales in 2018 that surpassed its annual goal of $100 million.
Crucially, after years of sluggish user growth, SoundCloud’s base rose in each of the past three quarters. While the company remains a loss maker and its long-term prospects are uncertain, the growth is encouraging.
Not long ago, just months before it was expected to run out of cash, SoundCloud’s founders were faced with a choice: sell, or raise money and find a viable business model for the service that had been a driving force in music, but has been squeezed in a market dominated by Spotify and Apple.
Mr. Trainor convinced management and investors that SoundCloud was worth another shot and took over as chief executive from co-founder Alex Ljung, who became chairman. Seven months later, he says SoundCloud says the company “has never been healthier financially”.
SoundCloud has struggled to find its place and build a sustainable business model. After being pressured to build its own subscription product, Mr Trainor says SoundCloud has switched gears an is no longer trying to mimic Spotify. Instead, the company wants to focus on its original market among the creators of music. SoundCloud sells tools to artists and podcasters, such as data on listener habits or extra storage, for between $70 and $100 a year.
Source: Financial Times