SoundCloud avoids being shutdown with new investment, CEO removal

SoundCloud avoids being shutdown with new investment, CEO removal

SoundCloud's shareholders have until the end of the day to approve a rescue plan for the flagging streaming music firm, according to Axios, which cites a memo seemingly sent to the company's investors earlier this week.

According to Axios, the incoming "rescue investors", Raine Group and Temasek, would receive "preferential treatment", which potentially means worsened terms for older SoundCloud investors, making it more hard to recover the money they've invested.

SoundCloud's current pre-money valuation is $150 million a sharp decline from its previous valuation of $700 million, and it is now asking for $170 million to keep the website alive.

Alongside the investment announcement Friday, Kerry Trainer, formerly chief executive of Vimeo, will become chief executive of SoundCloud, while Alexander Ljung, the current CEO, will step down to become chairman of the board. Eric Wahlforss, a co-founder of the SoundCloud, will remain with the company as chief product officer.

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Trainor told Billboard his experience running Vimeo - a platform created by filmmakers to share and monetize their videos - would inform his work at SoundCloud, as he places greater emphasis on developing tools for musicians, DJs and other creators. The Unlimited offering, for a $15 monthly fee, lifts the cap on the amount of music that can be uploaded and provides more specific analytics.

Ljung didn't say how much the company had raised, but said it was the biggest in the company's history.

As we said before, the existing SoundCloud investors aren't in the best of situations.

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