Berlin-based SoundCloud is one of the most popular audio sharing and online music listening platform of today which has more than 175 million listeners every month. It’s even forecasted that it is on its way to hitting its 200 million mark. This sounds really good but the company hasn’t managed to run away from its $29 million loss in 2013.
The 2013 filings showed that the audio sharing platform posted $14.1 million of revenues which was 40% higher than the year before but the $15.72 million operating loss of 2012 was too much for SoundCloud to bounce back.
In 2013, the company had 224 employees in San Francisco, Sofia, Berlin and London and while it didn’t have any acquisition that year, the Sofia offices were built following the purchase of the Instinctiv which is a Bulgarian-based startup. It was purchased by the company in 2012 for $10 million.
Currently, SoundCloud has declared a funding of a total of $123.3 million including a Series D round during the first part of 2014 of $60 million from the Chernin Group and the Institutional Venture Partners. Also, in July 2014 the company picked up an undeclared amount funds from the German Startups group.
Founded in Stockholm by Eric Wahlforss and Alex Ljung before it was moved in 2007 in Berlin, the company has been talking to its major partners about the plan of monetizing its content. The most recent happening with the company is its launch of its ad platform in August with big advertisers like Comedy Central, Jaguar and Red Bull that made way for the sharpening of its premium subscriber plans.
The idea of the launch of the ad platform was to partner with big brands and to team up with record labels for their advertisements together with music from artists who have signed to the mentioned labels.
Deals with the big brands have been quiet complex since the labels are more than just ads with content that SoundCloud hosts and consumed but the issue of paying out royalties. This is said without having to go into details of what each party’s offer of unsatisfying terms.
Just this October, there have been reports that SounCloud’s attempts to tie up with the major brands have stalled with Sony, Universal and Warner. They are all unhappy with the licensing offers of the company and Universal has chosen to decline the negotiations after the discussions have been put on hold.