News items about SoundCloud are so repetitive, they’re starting to sound like a broken record. We’ve reported more than once about how either SoundCloud is rapidly burning thru the money it has, or that it’s taken on more debt in the form of venture capital. This week’s SoundCloud news is focused on the second of those two, as apparently Twitter has invested $70million dollars in the audio platform.
This fact on its own is amusing considering Twitter itself has yet to actually turn a profit. Also, this isn’t the first time SoundCloud and Twitter have been linked financially. In 2014, rumors began circulating that the micro-blogging service was about to buy SoundCloud. But that deal ultimately fell thru. Now the two companies have come back together. But this time, Twitter isn’t going for the full buyout.
Since its launch in 2007, SoundCloud has raised over $193million in funding thru a total of five investment rounds. The money has come from nine different investors, including Twitter. Historically, it’s been difficult for audio-streaming services to reach profitability. The biggest hurdle these kinds of companies must overcome is dealing with the licensing and legal issues that arise around streaming music. SoundCloud has even had to consider giving equity to the major record labels in order to keep them happy.
While it does provide services for podcasters, SoundCloud has always been a music-first platform. It’s hard to say what SoundCloud’s financial standing could mean for podcasters who rely on the service. But if the company doesn’t at least break even soon, SoundCloud’s future doesn’t look very bright.