Is struggling SoundCloud a billion dollar company? If the Wall Street Journal‘s reporting is to believed, some investors are gambling that it is:
SoundCloud, a popular music and audio-sharing service, is in discussions to raise about $150 million in new financing at a valuation that is expected to top $1.2 billion, according to two people with knowledge of the negotiations.
As we wrote last month, SoundCloud recently finalized a deal with Warner Music Group and announced a new subscription service to be launched in 2015. All of this after reports that the music streaming company was hemorrhaging cash as it struggled to monetize its platform. Other major labels like Sony and Universal, displeased with SoundCloud’s monetization efforts, have so far turned up their noses to licensing agreements. Will another cash injection give it a leg up in its efforts? Again, the Wall Street Journal thinks so:
With a large cash infusion, SoundCloud will have further leverage to iron out its business model and negotiate its deals with the record labels. Prior to this round, it raised about $60 million late last year at a $700 million valuation.
With this rumored increased valuation, the narrative has shifted and SoundCloud–once seen as a frail giant–is now being mentioned in the same sentence with powerhouse distributors of licensed music like Spotify and Apple’s Beats. Time will tell.