SoundCloud CEO and cofounder Alex Ljung is stepping down from the top role as the company announces a new round of funding from investors The Raine Group and Temasek. The round reportedly comes in at $170 million (£130 million).
Ljung won’t be leaving the company, he confirmed in a blog post, but will remain in the role of chairman in “the long-term.”
SoundCloud’s new CEO will be former Vimeo CEO Kerry Trainor, who stepped down in August last year. The new COO is another Vimeo alumnus, Mike Weissman, who held the same position at the video company but quit to join SoundCloud.
Ljung didn’t say how much the company had raised, but said it was the biggest in the company’s history. That means the new round is larger than the $70 million (£53.9 million) in debt funding it raised in March. Axios yesterday pegged the new round at $170 million, describing today as SoundCloud’s “do or die day” to seal new funding. The new investors reportedly have more than 50% of the company, according to Variety, meaning ordinary investors won’t see much of a payout.
Ljuing wrote, as he has before, that SoundCloud “isn’t going anywhere” with the new funding round.
He said: “Over the last few weeks, I’ve been moved by the outpouring of commentary around SoundCloud’s unique & crucial role in driving what global culture is today (and what it will become tomorrow). You’ve told me how, without SoundCloud, there would be a giant gaping void in today’s world of music. We can’t have that, and I’m happy to once again say that won’t be happening.”
Ljung added that he had been “balancing” the roles of CEO, founder, and chairman for a decade and that it was time for him to hand the reins over. “This, I know, sets us up as an even greater team for the decade(s) to come,” he said.
This funding round comes in the nick of time
The round follows a difficult summer for SoundCloud. In July, SoundCloud cut 40% of its staff, triggering rumours it was running out of cash and would shortly shut down. Fans and data nerds immediately began trying to download SoundCloud’s entire catalogue to preserve it for posterity – which SoundCloud quickly put a stop to.
Former SoundCloud employees spoke to Business Insider after the cuts, saying “nobody saw it coming,” and asking why the company was still hiring aggressively if it needed to cut staff numbers. You can read about SoundCloud’s troubled history here.
SoundCloud’s new investor The Raine Group is a New York-based merchant bank with a portfolio that includes video news startup Chedder, the “Uber for helicopters” Blade, and dating app Happen. Temasek is a Singerpore-headquartered firm which mostly makes investments in other financial institutions, such as Standard Chartered.
Here’s Ljung’s full announcement about the funding:
“Exciting news and the future of SoundCloud Hey everyone,
Recently you heard me say SoundCloud isn’t going anywhere. And today I’m here to tell you the exact same thing once again. In all caps.
I’m happy to announce that together with investors The Raine Group and Temasek we’ve just wrapped up the largest financing round in the history of SoundCloud. This financing means SoundCloud remains strong, independent and here to stay. As I said, we’re not going anywhere.
Over the last few weeks, I’ve been moved by the outpouring of commentary around SoundCloud’s unique & crucial role in driving what global culture is today (and what it will become tomorrow). You’ve told me how, without SoundCloud, there would be a giant gaping void in today’s world of music. We can’t have that, and I’m happy to once again say that won’t be happening.
I’m excited to also announce that this new partnership also brings talent to our SoundCloud family. From prior Vimeo-fame (a platform we love!) comes Kerry Trainor and Mike Weissman, two awesome leaders who will be joining SoundCloud as CEO and COO, respectively.
Wait, CEO? Am I leaving? No, absolutely not. After a decade of balancing the roles of Founder, CEO and Chairman I’m excited to hand the CEO reins over to Kerry to allow me to fully focus on the role of the Chairman and the long-term. This, I know, sets us up as an even greater team for the decade(s) to come.
10 years ago SoundCloud was just an idea Eric and I bounced around. Today it’s a platform essential to the shaping of songs, artists, genres and global culture. I can’t fathom how we’ve been so lucky as to create that. But what’s even better is this: we’re all just getting started. The first 10 years are done, and now we’re onto decade II.
SoundCloud, just like music, will continue to evolve, but importantly, both will always be a key part of life.
Alexander Ljung Founder & Chairman, SoundCloud”.