FRANKFURT (Reuters) – SoundCloud has received a “substantial” round of investment, the online music streaming service said on Friday, insulating it from potentially running out of cash later this year.
The company, which laid off 40 percent of its staff in July, said in a blog post that the financing was raised from media-focused investment bank Raine Group of New York and Singapore’s sovereign wealth fund Temasek [TEM.UL].
It did not disclose the amount of the funding or its terms.
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.
The company said that as part of the new investment, digital media veterans Kerry Trainor and Michael Weissman, respectively the former chief executive and chief operating officer of online video service Vimeo, would take the same roles at SoundCloud.
SoundCloud founder and former CEO Alexander Ljung has agreed to step aside to become chairman of the board, it said. Co-founder and Chief Technology Officer Eric Wahlross will remain at the company as chief product officer.
In July, SoundCloud fired 173 employees or 40 percent of the total and closed its London and San Francisco offices to focus on Berlin and New York. A spokeswoman for SoundCloud said last month it remained fully funded into the fourth quarter, while declining to comment on what lay beyond.
“The investment will ensure a strong, independent future for SoundCloud, funding deeper development and marketing of its core tools used by millions of audio creators – musicians, DJs, producers, labels, managers and podcasters,” SoundCloud said.
In its blog post, the decade-old, Berlin-based company said that at current sales levels, it was on track to more than double its revenue to $100 million over the next 12 months.
Its free service remains popular with tens of millions of users worldwide, industry analysts say.
But SoundCloud has struggled to develop a user subscription model to pay hefty royalties and compete with streaming music leaders Spotify, as well as encroaching rivals Apple (AAPL.O) and Amazon (AMZN.O).
Raine Group has been an active U.S. investor in media and entertainment, having backed Vice Media, Important Studios, the production venture of South Park creators Matt Stone and Trey Parker and the fantasy sports team firm Draft Kings.
Temasek has been one of the world’s most active technology investors, backing roughly 90 companies in the sector stretching back to the dot-com era.
Reporting By Eric Auchard; Editing by Edward Taylor and David Holmes