(AllHipHop News) There seems to be a troubling financial situation taking place with SoundCloud.
The streaming service recently laid off 40% of its workforce, but things may be even more critical for its staff and users.
TechCrunch reports a conference meeting from SoundCloud’s Berlin headquarters included founders Alex Ljung and Eric Wahlforss admitting the company only has enough money to make it until the fourth quarter 2017.
A SoundCloud representative told the technology news outlet, “We are fully funded into Q4.”
That reportedly only leaves enough funds for about the next 80 days, but there are apparently talks underway with potential investors.
Reports began circulating in March that SoundCloud raised $70 million in debt funding credit.
“We are pleased to have secured a flexible $70 million credit line from Ares Capital, Kreos Capital and Davidson Technology that is ideally structured for a company with our strong credit rating and in our stage of growth,” said SC in a statement at the time. “This new funding will enable SoundCloud to strategically grow our technology and personnel resources to fuel our expected 2.5 times year-over-year growth in 2017, while building a financially sustainable platform on which our connected community of creators, listeners and curators can thrive for years to come.”
A mid-priced SoundCloud subscription plan ($4.99/month) was rolled out in February.
“SoundCloud Go answers the call from our users who want the ability to take the huge catalog of content found in SoundCloud’s free, ad-supported offering with them anytime, anywhere, without interruptions, at a very affordable price,” stated Alison Moore, SoundCloud’s Chief Revenue Officer. “And at the same time, we’re now giving users who haven’t made the jump into a music subscription plan, a robust, fully on-demand option at an accessible price.”
SoundCloud has become a valuable platform for this generation’s Hip Hop artists.
Its current Top 50 songs chart is dominated by Lil Pump, PnB Rock, Lil Uzi Vert, A Boogie wit da Hoodie, XXXtentacion, Playboi Carti, Tee Grizzley, Kodak Black, and Post Malone.
In 2016, Chance The Rapper’s Coloring Book was named SoundCloud’s “Top Album”, “Favorite Track” was awarded to Desiigner’s “Panda,” and Lil Uzi Vert earned the honor for “Most Followed Artist.”
Popular Hip Hop centered podcasts like The Read, The Brilliant Idiots, The Joe Budden Podcast, Bodega Boys, and The Combat Jack Show also upload content to SoundCloud.
TechCrunch has corrected its article to state SoundCloud is currently funded through 80 days, not 50 days.
AllHipHop.com has updated this article to reflect that correction.
In addition, SoundCloud issued a statement to Variety that reads:
There are a number of inaccuracies within the TechCrunch article. They seem to stem from a misinterpretation of information by one or two laid off employees during a recent all hands meeting. Due to the extensive number of inaccuracies, we will only comment regarding funding and layoffs. To clarify, SoundCloud is fully funded into the fourth quarter. We continue to be confident the changes made last week put us on our path to profitability and ensure SoundCloud’s long-term viability. In terms of layoffs, it is our policy not to discuss individual employee cases, but we can share we continue to work with all employees who were let go to support them during this transition, with employment and financial assistance.
AllHipHop.com reached out to representatives of SoundCloud for further comment.
As of press time, we have not received a response from the company.