SoundCloud is seeking US$150m in funding which will bring the online music-sharing service’s valuation to US$1.2bn.
That's according to Wall Street Journal sources, who say the company is seeking new licensing agreements with major record labels in an attempt to compete with Spotify and Beats Music, now owned by consumer tech titan Apple.
Launched in 2007 by sound designer Alex Liung and artist Eric Wahlforss, SoundCloud has been primarily associated with smaller labels and independent artists as an outlet to share music online, though pop stars such as Beyoncé and Miley Cyrus also keep accounts.
The site charges these artists monthly fees based on upload volume, which has traditionally been its primary revenue stream. This year, however, it began airing ads to listeners and has plans to launch a subscription service next year.
Twitter apparently was interested in acquiring SoundCloud earlier this year but the social network is believed to have backed out of talks, with speculation pointing at SoundCloud’s lack of licensing agreements to stream music as the main reason.
The Wall Street Journal speculated that with a new US$150m investment the company will wield more leverage to smooth its business model and negotiate key deals with major labels.
SoundCloud image via Shutterstock