SoundCloud’s ongoing demise has been a regular topic of coverage here at Podcaster News over the last few months. It seems like the Berlin-based music streaming service and podcast hosting provider just continues to slide ever deeper into the abyss.
The most recent report came earlier today, and this could be the big one for SoundCloud. The proverbial final nail in SoundCloud’s coffin. That big server in the sky where technology firms go when the VC runs out. The end.
SoundCloud recently entered talks with rescue investors Raine Group and Tamasek Holdings, and it looked like SoundCloud might be saved after all. But SoundCloud has taken a lot of money from a lot of different investors over the years. SoundCloud is so deep into funding rounds now that older investors have to approve any new investors that come on board. SoundCloud’s finances have been arranged so that newer investors get priority over older ones, and that means in the case of a fire sale or liquidation, Raine and Tamasek have much less to lose than the older, more established investors:
…the incoming ‘rescue’ investors Raine Group and Temasek would receive preferential treatment. Which basically means that other investors would be de-prioritized, receive worsened terms, and have a harder time recovering their cash.
…if the rescue package isn’t approved, the company won’t have enough money to survive. It would introduce a dangerous tailspin as employees jumped ship and the money dwindled to zero.
The crucial vote on whether or not to approve the rescue funding happens tomorrow, Friday, August 11th. If the rescue funding doesn’t go thru, SoundCloud will likely be forced to shut down the same day.