Soundcloud Has Never Been Healthier Financially

After what a terrible year 2017 was for Soundcloud, things have been turning around for this streaming giant that was once valued at $1 billion. It was reportedly willing to sell itself for around $250 million. After receiving a much-needed $170 million emergency bailout, the company pushed out its CEO, Alexander Ljung. As SoundCloud burned, investors found that he had wasted money and “partied like a rock star.”  He remains in the company as a ‘Chairman.’  Investors quickly rallied behind the company’s new CEO, Kerry Trainor, formerly of Vimeo who pulled together a fundraising deal in August with backing from Raine Group, the boutique US bank, and Temasek, Singapore’s state investment company, says SoundCloud made sales in 2017 that surpassed its annual goal of $100m.  Trainor said "We’ve significantly reduced the cash-burn” and that the company recently achieved a few cash flow positive months. Seven months later, he says the company “has never been healthier financially." After  SoundCloud abruptly fired 40% of its staff (173 people) and closed two lavish offices, remains lossmaking and it's long-term prospect uncertain, this once-upon-a-time streaming giant will look into its user growth which will encourage the music industry given the scale of the crisis at the group last summer. After being pressured to build their own subscription product, SoundCloud has switched gears and is no longer trying to mimic Spotify or Apple Music. 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.  According to Trainor, there are two benefits of this new strategy.  As artists pay for its tools, they post content that, in turn, draws in listeners on the platform.  More users mean more music creators will shell out for the company’s tools.  In addition, Trainor underscored the platform’s 177 million+ track count, as opposed to Spotify’s mere 40 million tracks. Positive feedback from listeners has also helped the platform go in popularity and relevance. SoundCloud Rap has produced emo-influenced rap artists who “have invaded the US music charts.”  As a whole, SoundCloud has yet to turn things completely around, a feat it never truly accomplished.  The company still continues to bleed money and the company’s premium product, SoundCloud Go, has yet to gain traction, and it has to compete with its competitors - Spotify (71 million subscribers) and Apple Music (36 million subscribers).  So, what exactly is SoundCloud’s best bet for long-term survivability?  To be in the best shape possible for Spotify to come knocking again! Spotify abandoned their acquisition of Soundcloud last year that worked well for them. But, Trainor remains hopeful and expects that Soundcloud will be 'potentially be of interest to suitors'.