Its funding may run out if its subscription service isn’t a hit.
The figures were revealed in a report from co-founder Alexander Ljung, who warned that the company may need to seek additional funding if its subscription service doesn’t perform as hoped.
“The assumption of a successful launch of the new subscription service is the key element of [our] financial projections for the next three years,” Ljung writes. “[This] bears financial risks regarding the operating results and cash flows of the group.
“The occurrence of these risks can seriously affect the ability of the group to generate sufficient cash to cover the planned expenditures and could require the Group to raise additional funds which have not yet been agreed.
“Whilst the directors believe that the Group will have sufficient funds to continue to meet its liabilities through 31 December 2017, the risks and uncertainties may cause the company to run out of cash earlier than that date, and would require the Group to raise additional funds which are not currently planned.”
SoundCloud launched its $9.99 per month subscription service SoundCloud Go last year, but it’s not known from the report how well that has performed.
Earlier this week it was reported that Google is been rumored to be interested in buying the company for $500 million, half of last year’s expected asking price.
Update: A SoundCloud spokesperson has reached out to FACT.
In a statement about the Companies House filing made public today, a SoundCloud spokesperson said the company is on “a very positive path” attributing their 2015 losses to “investing in technology, people and marketing, as well as securing complex licensing agreements with key music industry partners”.
“As such, the company remained unprofitable,” they say. “In 2016, we saw solid growth not only for the industry but for SoundCloud too. And we see this trend continuing throughout 2017.”
Read the full statement below.
“SoundCloud filed its 2015 accounts with Companies House in December, and they are now publicly available on their site as of today. The accounts show that, in 2015, we were heavily focused on putting the necessary measures in place to build out our monetization model, including our consumer subscription service, SoundCloud Go, and roll-out of advertising on the platform. This meant investing in technology, people and marketing, as well as securing complex licensing agreements with key music industry partners. As such, the company remained unprofitable.
“In 2016, we saw solid growth not only for the industry but for SoundCloud too. And we see this trend continuing throughout 2017. To date, we have successfully launched SoundCloud Go, our subscription service, and our ads business in eight markets, including the US, UK, Ireland, France, Australia, New Zealand, Canada and Germany. We are on a very positive path to achieving our aim of enabling all creators to be paid for their work, while also building a financially sustainable platform where our connected community of creators, listeners and curators can continue to thrive.”