SoundCloud won’t deny rumoured $1bn sale

Rumours that SoundCloud is up for a US1 billion (A$1.32 billion) sale – or is looking for strategic investments or partnerships – have intensified after the German streaming company refused to deny them.

Earlier this week, Bloomberg revealed that SoundCloud founders Alexander Ljung and Eric Wahlforss and major investors had put it on the market. Their challenge is that while the service is growing in terms of adding 1.5 million users a month (it now has 175 million followers) and adds 12 hours of music a minute, revenue take is not following suit.

In its last public reporting, in 2014, revenue was listed as $19 million (A$25.2 million) but operating losses were $43 million (A$57.1 million).

Bloomberg added that the $1 billion price tag was making it difficult to find suitors.

SoundCloud, founded eight years ago in Stockholm and later shifted to Berlin, began as a platform that allowed musicians to distribute their music tracks. It has 175 million users.

In March to generate more income, it launched SoundCloud Go, which included a premium service for ad-free streaming and greater access to albums. Reports are that only a fraction of the 175 have signed on as other services have a more diverse selection of tracks.

Last month it raised $70 million (A$93 million) from Twitter as part of a $100 million (A$132.8 million) funding round. This round only valued the company at $700 million (A$929.8 million).