After weeks of speculation over what might be next for SoundCloud, the troubled music streaming service just secured a $170 million investment from the Raine Group and a Singapore-based company called Temasek. It’s also getting two new top executives. Kerry Trainer, former CEO of Vimeo, will replace cofounder and longtime CEO Alex Ljung, who will stay on as chairman of the company’s board. Michael Weissman, formerly Vimeo’s COO, will carry that same title over to SoundCloud as well.
For now, the investment and badly needed leadership change puts to rest the widespread media narrative that SoundCloud is doomed to run out of money and fail. But the 10-year-old startup still faces the daunting task of forging a viable business model in the unusually difficult business of streaming music, in which even much bigger players have difficulty turning music (and the steep costs required to license it) into profits.
Last month, rumors of Ljung’s imminent departure gave way to a much starker reality for the company: Its financial struggles forced it to lay off 40% of its staff and shutter two of its offices, sending remaining employees into a freaked-out tailspin (some of them have since left voluntarily) and sparking fear that SoundCloud could disappear into the graveyard of failed startups (which, I think, would be bad for everyone). The company may have avoided that fate for now, but it has a ton of work ahead if it wants to avoid finding itself in the same scenario again.JPT