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Raine Group and Temasek Holdings linked to possible SoundCloud investments

By | Published on Thursday 3 August 2017

SoundCloud

New York-based merchant bank The Raine Group and Singapore’s state-owned investment fund Temasek Holdings have both been linked to possible investments in SoundCloud. Presumably neither could find an actual wall to piss their money up against.

As previously reported, Bloomberg recently cited sources who said that two investment firms were in now talks to pump money into the flagging streaming music company via deals that would give the two investors, collectively, a majority stake in the firm.

If those investments come through, it would allow SoundCloud to continue with its stated ambition of remaining an independent entity as it tries to build the advertising and subscription sides of its business. Prior to the recent laying off of 40% of SoundCloud’s workforce, it had been speculated that the company would probably be bought outright by a rival in the streaming music market, most likely Spotify or Deezer.

Following the lay offs SoundCloud management told staff that they had sufficient financing in place to get them into quarter four, resulting in a flurry of doom and gloom chatter that the streaming platform – which still plays an important role in music discovery amongst early adopters and industry decision makers – could go offline in just a few months.

But SoundCloud insisted that it had a longer future than that, and new cash injections from The Raine Group and Temasek Holdings would certainly ensure short-term survival.

Though many in the industry remain unconvinced that SoundCloud can become a serious player in subscription streaming, especially now that both labels and DIY artists tend to get their brand new music into the likes of Spotify and Apple Music much quicker, removing SoundCloud’s USP of having the new tunes before everyone else.

There are probably still opportunities in the ad-funded free streaming space, though making a success of that requires a big ad sales operation. And the real opportunities in free streaming will probably only come to fruition once the premium streaming businesses of Spotify and Apple are sufficiently lucrative – and stable – so that the record labels and music publishers can finally accept that there is a place for mass market free streaming services, alongside the premium platforms, even though they pay much lower royalties.

It’s Bloomberg again which has linked both The Raine Group and Temasek Holdings to possible SoundCloud investments, though there’s been no official comment so far.

Boutique bank Raine already has interests in other media outfits like Vice Media, Imagine Entertainment and business news service Cheddar. It’s thought the bank would want to be involved in developing a new strategy for the SoundCloud business in a bid to turn round its fortunes, with some speculating that could result in a change of leadership at the streaming music company.



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