SoundCloud responds to reports suggesting the streaming service is on its way to bankruptcy.
Earlier this week, SoundCloud published a financial report that led many onlookers to posit that the company is headed toward imminent failure. The report showed that SoundCloud brought in far less than it spent ($17.35m to $44.19m) in 2014. During that time, the company also saw its administrative expenses increase by almost 68 percent.
According to the Financial Times, the company that carried out the audit, KPMG, reasoned that SoundCloud's "material uncertainty" poises serious concerns for the company's long-term viability. Even in the short term, it seems as though SoundCloud will have to bank on significant outside investment in order to stay afloat.
The report has led a few publications to put forth headlines about the imminent demise of the streaming service. Today, FACT Magazine published a piece titled "Five Reasons Why SoundCloud Might Doomed."
As word of its potential collapse is quickly spreading across the web, SoundCloud has issued a statement addressing the financial concerns surrounding the company.
There isn't too much to gain from the statement, aside from SoundCloud's insistence that business is just fine and that its streaming service gives users an unparalleled access to all types of music. Read below:
SoundCloud filed its 2014 accounts with Companies House. Beyond the full-year financials for 2014, which reflect those of a company in a strong growth stage, they show that, in 2015, we secured $77m of incremental capital, some of which came from our existing investors, demonstrating their belief in the future of the company, and the rest of which is a flexible credit line from Tennenbaum Capital Partners, an attractive option for companies like SoundCloud, who have a solid credit rating and are on a clear path to global success.
Since we began, we’ve been building a completely unique platform. SoundCloud users can discover more creators, at all stages of their careers, than anywhere else, and more music and audio: over 18 million creators are using the platform, sharing well over 110 million tracks, and reaching 175 million monthly active listeners. Additionally, comScore recently listed SoundCloud as being the 8th most popular app among millennials based on usage in the US.
Over the past year, we’ve continued to bring partners from the music industry onto SoundCloud. We’ve signed deals with PRS and UMG/UMPG, to add to the nearly 200 deals we’ve already signed, including those with Warner Music, Merlin and NMPA, as well as MCNs and independent creators. We’re focusing on enabling creators to get paid for their creativity, and on building a financially sustainable platform that our community can enjoy for years to come.