The music sharing platform’s rapid expansion has seen its costs run away from its revenues.
Headquartered in Berlin, SoundCloud’s growth has continued in recent years with the site now boasting in excess of 175 million monthly users. The platform’s attempts to keep up with its exponential growth have resulted in the company posting a 2013 loss that was almost twice the size of its revenue in that period.
According to recent annual filings for 2013, SoundCloud posted a turnover of €11.2 million (£8.8 million) in 2013, up 40% from 2012’s revenues of €8 million. But the company’s operating loss in this period more than doubled, to €23.1 million (£18.1 million) in 2013 from €12.4 million in 2012.
“We are in a phase of growing SoundCloud into the market-leading platform for listening to, creating and sharing sound,” says the company in the filing. “This has necessitated investment in technology, headcount and marketing. Our overhead base has increased faster than our revenues.”
Earlier this year SoundCloud announced plans to introduce advertising, allowing users to collect royalties for the first time.