Last year, it was reported that SoundCloud only had enough cash to survive until December. Since last year, SoundCloud has reportedly lost over 100 million users on its platform. In the same time period, SoundCloud has also lost 75% of its initial $1 billion valuation.
In a desperate round of fundraising in February, many of SoundCloud's executives left and the company was forced to close two major offices and let 173 people go. After SoundCloud's misfortunes, SoundCloud fired CEO Alexander Ljung and approved $170 million in emergency funding.
SoundCloud's Saving Grace?
The European streaming platform, Deezer, launched in the United States last year. With more than 40 million songs and 40,000 podcasts uploaded to the streaming services, Deezer has faced quite a bit of competition in the US such as Spotify, Apple Music, TIDAL, Napster, Pandora, Amazon Music, and Google Play Music. As Deezer gives 60% of its revenue to major labels, Deezer is reportedly in acquisition talks.
Speaking with Reuters, Albrecht confirmed that Deezer would purchase SoundCloud, but only “at the right price.”
Prior to SoundCloud's CEO removal, a source said “Deezer is making a serious run. There will be a lot of consolidation, if you are Deezer or Spotify. SoundCloud’s massive user base — one that is melting as it grapples with a shrinking pile of cash — lets you convert,’ into a much bigger player.”
Will Deezer try to make a bigger role in the United States with more acquisitions? Only time will tell at this point.
Source: DMN
