The future of SoundCloud has been a topic of discussion for some time, whether it be regarding deals with major labels or an investment from Twitter, and now there are reports the German company wants to sell.
Sources claim it’s valuing itself at $1 billion, according to Bloomberg, hoping to increase growth and profit through its users. However, those close to discussions state there have been difficulties finding a buyer willing to pay the asking price.
The Bloomberg report also says SoundCloud may yet decide against selling, but the company and investor Doughty Hanson & Co. are “exploring strategic options”.
Twitter was previously linked to buying the streaming service, later pulling out, but poured $70 million into it in June to “enable SoundCloud to remain focused on building value for creators and listeners alike”.
SoundCloud’s ad-free subscription service also came into play in March after licensing deals were struck with Universal Music Group, Warner Music Group and Sony Music.
The owners have had trouble finding a buyer willing to value the company at $1 billion so far, two of the people said. SoundCloud raised $70 million from Twitter Inc. in June, part of a $100 million funding round that priced the company at $700 million, a person familiar with the matter said at the time.
SoundCloud is working to generate reliable revenue from its approximately 175 million users, who spend time on the site to record, listen to and share songs. SoundCloud introduced a premium service in March, allowing customers to pay $10 a month for ad-free streaming and increased access to songs.
A representative for the company and a spokesman for Doughty Hanson didn’t immediately respond to requests for comment.
In 2014, the last year that SoundCloud publicly reported its accounts, sales rose 54 percent to 17.3 million euros ($19 million) from a year earlier. The operating loss at the time was 39 million euros, widening from 21.3 million euros in 2013.