SoundCloud buys artist distribution platform Repost NetworkMay 28, 2019 Off By Jill T Frey
The past year has seen Spotify embark on a series of acquisitions to beef up its service, particularly on podcast content. Now it is the turn of SoundCloud, another European music startup — albeit one that had lost its way in recent years — to go deal-making: the Berlin-based company has picked up Repost Network, a service that helps artists get the most out of SoundCloud.
The deal is undisclosed and it actually was announced last week, although it was not widely reported — perhaps an anecdotal sign of SoundCloud’s position as a relative outsider in today’s streaming market.
Once a pioneer of online distribution for artists, it has watched Sweden-headquartered Spotify takes its service global with a total audience of over 200 million monthly listeners. The competition includes services from Apple and Google as well as the likes of Pandora, Deezer and Jay-Z-owned Tidal.
Soundcloud had its come-to-Jesus-moment some 18 months ago when it raised a $169.5 million Series F fund led by New York investment bank Raine Group and Singapore’s sovereign wealth fund Temasek.
That deal, announced in August 2017, was very much kiss-of-life that saved SoundCloud from bankruptcy — just a month earlier, it laid off 40 percent of its staff to slash costs. The investment also saw a change at the top as former Vimeo CEO Kerry Trainor replaced co-founder Alex Ljung as CEO. The new money took SoundCloud to nearly $470 million raised, and the pre-money valuation was said to be $150 million — down from a previous of high of $700 million from previous rounds.
Still, things have progressed enough for this acquisition, which is SoundCloud’s second ever. The company said the purchase will enable its top artists to access Repost Network’s tools, which include streaming distribution, analytics dashboards and content protection.
That restructuring, painful as it was, looks to have put the focus on the fundamentals. Filings from the company indicate that its revenue grew 80 percent year-on-year to reach €90.7 million ($102 million) in 2017, while losses narrowed by 27 percent to reach €51.4 million, or $58 million. Those results are from the beginning of Trainor’s tenure, we’ll have to wait on its newest filings to get a clearer picture of how things are going.
SoundCloud’s first acquisition was back in 2012 when it paid $10 million purchase of Instinctiv, a music management startup.