SoundCloud‘s losses grew faster than its revenues in 2015 – with the company now admitting that, should its subscription service flop, its funding may run dry this year.
According to a new filing at Companies House (UK), SoundCloud Ltd’s revenues grew 21.6% to €21.1m ($22m) in 2015 – but its net losses accelerated 30.9% to €51.22m ($52m).
Despite these worries, it’s still a lucrative place to work.
SoundCloud’s headcount grew by 25% in 2015, up from 236 to 295 people. It spent €26.77m ($28m) on wages and salaries in the year – up 49% year-on-year.
That meant the average annual salary at the company hit €90,729 ($95k) in 2015 – up 19% on the €75,979 ($80k) average wage paid out to staff in 2014.
Appraising the state of SoundCloud’s business in a Director’s report, co-founder Alexander Ljung (pictured) noted:
“The assumption of a successful launch of the new subscription service is the key element of [our] financial projections for the next three years… [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.
“SoundCloud may run out of cash earlier than December 31, 2017…These matters give rise to a material uncertainty about the Group’s ability to continue as a going concern.”
“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.
“These matters give rise to a material uncertainty about the Group’s ability to continue as a going concern.”
SoundCloud launched its $9.99-per-month subscription service, SoundCloud Go, in the US, UK and Germany last year.
According to its filings, SoundCloud finished 2015 with €12.45m ($13.1m) cash in the bank and a €13.2m ($13.8m) net cash position.
Earlier this week, MBW noted that it was hearing high-level rumors that Google was mulling an acquisition of SoundCloud following Spotify‘s decision to walk away from a potential deal.
We also confirmed that the three major music companies – Universal, Sony and Warner – all own stakes in SoundCloud Ltd.
Music Business Worldwide
