A crucial vote by investors today will determine SoundCloud's fate
SoundCloud's recent financial troubles have been well documented, not least since the company was forced to lay off 40 per cent of its staff last month. But now the final act is approaching, with investors set to vote on a rescue funding package today.
The rescue package is being offered by two private equity firms, Raine Group and Temasek, who seek a 50 per cent share in the company in return. If their offer is accepted, then SoundCloud will receive a financial shot in the arm to the tune of $169.5 million; however, the company will also have to undertake a major reorganisation at Raine Group and Temasek's behest.
That would mean existing investors would have less of a say in the how SoundCloud is run, and it's feared many may now decide - having already seen the company's estimated value shrink from nearly $1bn to just $150 million - to cut their losses and run. If they do then, according to TechCrunch, SoundCloud CED Alexander Ljung has told investors that Soundcloud will not be able to "continue as a going concern".
Even if investors do vote to accept the proposal, it may not be business as usual for the service, with business analysts suggesting that a full sale will then need to be negotiated to keep the company afloat.