SoundCloud started out as an alternative method for DJs and artists to get their music and other creations streaming on the Internet without relying on big services like Apple Music or Spotify. Despite those roots, the company is increasingly moving towards a more mainstream model. One step in that journey is the possible sale of the company, a move the owners hope will yield a $1 billion sales price.
The infusion of that much cash into the company would help SoundCloud continue to grow and generate profit. Recently SoundCloud made a change to introduce a premium subscription service for $10 per month in exchange for ad free listening. This move is part of an effort to stabilize revenue streams even though it has a “mainstream” feel to it. Selling the company would be a similar mainstream type move for SoundCloud.
Unidentified sources indicate the owners of SoundCloud are having some trouble generating the level of financial interest in the company that they are expecting. In June SoundCloud raised $100 million which included $70 million just from Twitter Inc. Sources say that as part of the valuation process related to that funding round, the company was only valued at $700 million.
The early efforts to secure $1 billion involve SoundCloud’s owners, both founders and investors alike. One of the parties is the investment firm Doughty Hanson & Co. Indications are that the development of a strategy, including the potential sale of SoundCloud, are still in the early stages of concrete development even though the idea has been floated internally for some time now.