Investors rescue embattled SoundCloud with $170 million lifeline

SoundCloud Sound Cloud music streaming Alexnader Ljung Sound Cloud CEO Sound Cloud market Vimeo Spotify

The company, which laid off 40% of its staff in July, said in a blog post that the financing was raised from media-focused investment bank Raine Group of NY and Singapore's sovereign wealth fund Temasek.

SoundCloud was launched in 2008 and has never said how many paying subscribers it has, but launched a budget subscription package for hoping that will have more listeners to convert from its free service, which that also did not do well. Raine and Temasek were not immediately available for comment.

SoundCloud's existing CEO, co-founder Alexander Ljung, will be staying at the company as chairman of the board.

Along with the new investment, Ljung will step out of the role of CEO which will go to Kerry Trainor, who is best known for his time at Vimeo as CEO.

The struggling audio-hosting startup SoundCloud has secured a financial lifeline, with two investors putting up nearly $170 million to help the company stay afloat, according to Billboard.

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SoundCloud's struggles have been well publicized over recent months.

With largest amount of founds and new leadership the SoundCloud will now need to look at reducing costs and monetizes the service.

SoundCloud remains the world's most popular free music phone app, with roughly 88 million active users, according to online audience tracking firm SimilarWeb. Atop all that, should this new investment close tomorrow, SoundCloud's pre-money valuation will have decreased a whopping 77 percent, from $640 million in 2014 to $150 million.

Axios reports it has obtained a memo that was sent to SoundCloud's current shareholders on Tuesday, indicating that a pending reorganization proposal is "do or die" for the music streaming platform. It cited Mr. Ljung saying that otherwise, SoundCloud would not be able "to continue as a going concern". Temasek has been one of the world's most active technology investors, backing roughly 90 companies in the sector stretching back to the dot-com era.

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