On the heels of losses that appear to be growing faster than revenues, and reported acquisition interest from Google, the music streaming service SoundCloud today announced some executive movements.
Eric Wahlforss, who co-founded the audio streaming startup with Alexander Ljung, is stepping away from the role of CTO and taking a new position as chief product officer. Meanwhile, SoundCloud has hired a new CTO, Artem Fishman, who most recently had been a vice president of engineering at Yahoo, overseeing mobile engineering. Both will be based out of SoundCloud’s offices in Berlin.
The moves highlight how SoundCloud is bringing in more technical leadership into its organization, while at the same time working to diversify its product to bring in more routes to monetization.
“SoundCloud is a truly unique platform in the music streaming space,” said Alex Ljung, co-founder and chief executive officer of SoundCloud, in a statement. “We have ambitious goals to further innovate the user experience for our connected community of creators, curators and listeners, and as we enter into this next stage of growth, Eric and I felt it was important to bring in a senior leader to oversee Engineering, to allow Eric to have laser focus on leading and aligning the exciting product initiatives we have slated to launch later this year.”
The need to make more money and at a (positive) margin is strong: in its most recent financial filings in the U.K. (via Music Business Worldwide), the company posted a loss of $52 million on revenues of $22 million in 2015.
SoundCloud, which was founded in 2007, has become a go-to place for creators to upload and share their music and other audio tracks.
But partly because it needed to work out licensing deals with rights holders whose music was both uploaded directly as well as sampled in other tracks, it was only in 2016 that SoundCloud started to finally get revenue generation in gear. The first big product was the launch of Go, a premium subscription service (SoundCloud had paid products before, but not aimed at its wider public of 175 million users).
The company has been an acquisition target for years now, although approaches both by Twitter and Spotify have fallen short, with Twitter ultimately becoming only an investor, and Spotify apparently choosing instead to focus its resources on its IPO and what might be needed for that.
More recently, there have been reports (also via MBW) alleging that Google is now interested, which is perhaps fitting, considering that SoundCloud is often described as the “YouTube for audio.” Twitter and Spotify had been looking at a SoundCloud valuation of $1 billion, while Google allegedly is looking at a price tag of only half that, $500 million.
We asked both SoundCloud and Google to comment on the report and will update as we learn more.
Wahlforss will lead both SoundCloud’s engineering and design teams, as well as have oversight of its data and insights analytics business.
“Artem is a seasoned engineering executive who brings with him a wealth of experience and a positive, collaborative mindset,” he said in a statement. “We’re delighted he will be joining SoundCloud as our new Chief Technology Officer, which is a key role as we continue to innovate and grow. Fishman has a keen interest in deep technical details and data-driven approaches which, alongside his leadership skills and passion for our product, will be of real benefit to the engineering organization.”