SoundCloud's CEO confirmed he's looking for more funding less than a week after cutting 40% of his workforce

pulse

July 12, 2017 3:58 PM

The CEO was asked whether he's looking to raise a $250 million round.

SoundCloud CEO Alex Ljung and TechCrunch editor-at-large Mike Butcher.

SoundCloud CEO Alex Ljung is in the process of raising another round of funding as part of a wider effort to help keep the Berlin-headquartered music streaming service independent.

TechCrunch editor-at-large Mike Butcher asked Ljung at the Tech Open Air conference in Berlin on Wednesday whether he was trying to raise a $250 million (£194 million) funding round for SoundCloud.

"We are raising a round of financing at this point," Ljung replied. "But that's not as interesting as the music on the platform."

Last week, SoundCloud cut its workforce by 40% and closed offices in London and San Francisco in a bid to help it become profitable. SoundCloud had to cut 173 people from its 420 strong team because it failed to raise more money, according to a Business Insider source.

In reference to the job cuts, Ljung said: "These are incredibly talented people who I have no doubt will be able to get new jobs but it's incredibly sad. It's a very, very sad time, especially for them."

He added: "Now is the time where we have to take more control over our situation. What we're doing is laying off 173 people, which will mean a significant reduction in cost for the business."

The job cuts come after reports suggested that the company, which has been valued at $700 million (£557 million) by investors, could be about to sell at a knockdown price, possibly leaving early shareholders with little to cash in.

Google, Spotify, and Twitter have all expressed an interest in acquiring the company for various sums, according to reports. Ljung declined to comment on the acquisition rumours, saying "You'll have to ask Google about what their strategy is. I'm building a strong independent company that is incredibly important for music."

SoundCloud — which has raised $198 million (£154 million), including around $70 million (£59 million) from Twitter, according to startup funding tracker Crunchbase — was in talks to sell for $1 billion (£800 million), according to a Bloomberg report last July. But that figure had dropped to $250 million (£199 million) by March, according to a Recode report.

Looking ahead, Ljung said SoundCloud will put more of a focus on the creators that upload content onto its platform. "We're going to be doing less things that other people are doing and more things that are completely unique to what SoundCloud can do because of the creators and the content," he said.

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