New financial filings show the Berlin-based company lost $44 million in 2014
SoundCloud just can’t seem to get its shit together. After announcing a monumental deal with Universal Music Group, the company should have been well on its way to producing a profit and functioning like a somewhat competent company. Unfortunately that doesn’t appear to be happening and the dire financial situation of the company is even worse than most had originally thought.
New financial filings show the Berlin-based company lost $44 million in 2014 on revenue of only $15 million. The result means that between 2012-2014 SoundCloud lost $85 million and brought in $42 million in income. In 2015, the company raised $75 million in funding but you don’t need a business degree to understand that’s a highly unsustainable approach to conducting business.
On the bright side, with a burn rate like this, it’s only a matter of time before SoundCloud becomes a ripe candidate for an acquisition. We’re guessing a company like Pandora with an established advertising base and need to grow its own personal revenue streams might be a prime buyer for such a company. Combining the budding new music scene with the music genome project could open the possibilities for industry innovation. What we do know is that SoundCloud might have missed the boat for incorporating advertising and music licensing shenanigans into their platform seamlessly thus hurting user experience when they try.
Hopefully SoundCloud reorganizes quickly. The platform is a great place to find new music and support undiscovered artists. It would be a shame to see another promising business furthering the music industry bite the dust over poor management.