SoundCloud secures its 'largest financing round,' names former Vimeo exec new CEO

Enlarge  Alexander Ljung co-founder of SoundCloud will step aside

The struggling audio-hosting startup SoundCloud has secured a financial lifeline, with two investors putting up nearly $170 million to help the company stay afloat, according to Billboard.

One source familiar with the investment said it amounted to around US$170mil, as reported last Thursday by online news site Axios, which had obtained the deal's term sheet. From prior Vimeo-fame (a platform we love!) comes Kerry Trainor and Mike Weissman, two awesome leaders who will be joining SoundCloud as CEO and COO, respectively.

As to why he is stepping down, Ljung said: "After a decade of balancing the roles of founder, CEO and chairman I'm excited to hand the CEO reins over to Kerry to allow me to fully focus on the role of the Chairman and the long-term".

Digital music service SoundCloud will continue to operate following a new investment round.

Whether or not this detail is compatible with SoundCloud's reputation as an "independent" and artist-driven player in the music streaming space remains to be seen.

Speaking to Billboard, Trainor highlighted plans to develop a "robust creative toolkit" for SoundCloud's Unlimited service in hopes of attracting more musicians to pay for its most expensive subscription. Raine, a boutique investment bank, has also backed Vice Media, DraftKings and Imagine Entertainment. Although Ljung has been the CEO and chairman of the company for almost a decade, the founder will now simply just oversee the company as a chairman.

That's the approach Trainor used at Vimeo: charging filmmakers to use its video-sharing, marketing and analytics tools.

Most of the content available on SoundCloud is free and efforts to introduce paid tiers didn't take off with customers. Inc. and AOL, who said the company is on track to have $100 million in revenue in 2017. The company last month cut 40 percent of its staff and closed offices in San Francisco and London.