SoundCloud has lost two key execs as it heads out “begging for money”, according to the Financial Times, which has an anonymous source dubbing the firm’s latest funding round as “begging”. Chief Operating Officer Marc Strigel and Finance Director Markus Harder have both left the company, it has now been confirmed.
Since Spotify decided not to buy SoundCloud late last year, the digital firm’s future has been in increasing doubt. The publication of its 2015 financial results last month didn’t help matters. And although the company moved to assure everyone that everything is just fine, founder Alexander Ljung’s admission that the company could run out of money before the end of this year has not instilled much confidence.
The company’s long-term future now seemingly relies on the successful launch of its Spotify-competing SoundCloud Go subscription service. Management say that they are confident that can be achieved. However, launching such a service is costly, and will take a number of years to bear fruit even if it works.
Last summer, SoundCloud raised $100 million in new funding, including $70 million from former proposed buyer Twitter. It’s now reportedly on the search for new investment, but so far without much luck.
“SoundCloud is begging for money, but I wouldn’t give them any right now”, one German financier told the FT. “They need to rethink their valuation and settle for a down round”.