Merchant bank Raine Group and Singaporean state-owned investment firm Temasek agreed on Friday to invest a “significant” amount in Germany-based, corporate-backed online music streaming platform SoundCloud to keep it afloat.
SoundCloud, whose investors include social media company Twitter, has not disclosed the details of the deal, but Axios reported Raine and Temasek were set to invest approximately $170m at a $150m pre-money valuation, which would give them a 53% stake in the company.
Founded in Sweden in 2007, SoundCloud operates an online platform where music can be uploaded, shared and streamed. It has built up a large user base and has support from a variety of artists but has been far slower to monetise than rivals like Spotify which has hurt earning potential.
The company cut its headcount by 40% in July this year and was struggling to raise the required funding to carry on operations. It had been valued at $700m in June 2016 when Twitter’s corporate venturing arm, Twitter Ventures, invested $70m.
Raine and Temasek’s investment was made a part of a restructuring effort that will involve Kerry Trainor and Michael Weissman, who both previously had key roles at online video platform Vimeo, taking the chief executive and chief operating officer roles at the company.
Co-founders Alexander Ljung and Eric Wahlforss, previously the chief executive and chief technology officer, have moved to chairman and chief product officer positions respectively.
Existing SoundCloud investors Union Square Ventures, Doughty Hanson Technology Ventures and Atlantic Technology were set to invest alongside Raine and Temasek and would receive series F preferred stock, according to Axios, but were not mentioned in the statement announcing the deal.
SoundCloud had previously received approximately $190m in equity financing and $105m in debt. Media company Chernin Group invested in its $60m series D round in 2014, reportedly also at a $700m valuation.
The company’s earlier backers include Institutional Venture Partners, Kleiner Perkins Caufield & Byers, GGV Capital and Index Ventures.