SoundCloud denies that it is “begging for money”
By Andy Malt | Published on Tuesday 14 February 2017
SoundCloud has labelled a Financial Times report that said it was now basically “begging for money” as it seeks to raise new investment as “disappointing and surprising”.
As previously reported, in its article this weekend, the FT noted that two key execs, Chief Operating Officer Marc Strigel and Finance Director Markus Harder, had both left the company. It then quoted an unnamed German financier as saying: “SoundCloud is begging for money, but I wouldn’t give them any right now. They need to rethink their valuation and settle for a down round”.
Responding yesterday, SoundCloud said: “The Financial Times relies on one anonymous source to tell an inaccurate story about SoundCloud. SoundCloud is currently fundraising, which is typical of most start-ups of our size and in our phase of growth. That the Financial Times would compromise its journalistic standards to include an anonymous quote characterising this normal course of fundraising as ‘desperation’ is disappointing and surprising for a newspaper of record”.
It continued: “As we communicated clearly to the Financial Times, two executives have left the company after five years to pursue new opportunities. This is unrelated to our normal course of fundraising efforts, which are being led by our recently appointed Chief Financial Officer, Holly Lim. SoundCloud remains in a position of strength and is confident in its long-term prospects as it continues to be the go-to platform for the creative community”.
So SoundCloud remains bullish. However, the firm’s long-term future still seems to be dependent on its newish premium subscription service succeeding, which is far from assured, not least because the move into paid-for streaming puts it up against more established and better funded rivals like Spotify and Apple Music.