SoundCloud may face liquidation today, unless investors accept 'do-or-die' proposal

SoundCloud's Hail Mary Deal: Music Service Nearing Majority Investment From Raine Group, Temasek

Following persistent cash struggles and rumors that the service could be close to folding, it emerged a couple weeks ago that Soundcloud was set to secure new funding from two private equity firms.

As Billboard reports, merchant bank Raine Group has teamed up with Singapore-based investment company Temasek to fire over a $169.5 million Dollars investment to SoundCloud. In 2016, the company raised $70 million from Twitter, according to Variety. SoundCloud Chief Executive Officer Alex Ljung is being replaced by Kerry Trainor, the former head of the online video service Vimeo. Axios yesterday pegged the new round at $170 million (£130 million), describing today as SoundCloud's "do or die day" to seal new funding. A sharp reduction from last year's $700 million evaluation when Soundcloud was going through its last round of funding. Co-founder and Chief Technology Officer Eric Wahlross will remain at the company as chief product officer. "We see a strong, independent future for the company".

Along with the investment news, SoundCloud also announced some changes in leadership. As the home to the world's most diverse creator community and the largest music streaming catalog available, SoundCloud lets you stream, share, discover and influence global music culture. If SoundCloud is sold or liquidated, Raine Group and Temasek would be the first investors allowed to recover their funds, along with other investors involved in what's called a "Series F".

The Daily Caller News Foundation reached out to SoundCloud, but it did not respond to the inquiry by time of publication.

SoundCloud is closing in on a Hail Mary deal that is meant to guarantee the company's financial survival and give it a chance to pay down its debt, but comes with some serious sacrifices for existing investors. Many of those are hosted elsewhere, of course, but many aren't, as lots of artists use Soundcloud as their primary outlet for releasing and promoting material.

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