We are all familiar with all the websites around that allow you to download all of your favorite music. But how many are aware that there is a site where you can upload your music? SoundCloud is one such company. It is a startup company that is based in Berlin.
You may be familiar with other music services such as Spotify (News - Alert) and rdio, the difference is that SoundCloud allows amateur musicians upload their own songs. One point that is a little suspicious though is the fact that these people can also upload remixes of popular artists.
SoundCloud has established incredible reach by giving consumers something they want for free. It has also been said that these means may be a little unorthodox. It appears that one reason SoundCloud has been able to avoid subscription fees is that not all its music is legal.
That is why today’s news is important to SoundCloud. The company recently closed a Series D round of funding. This was led by Institutional Venture Partners along with the Chernin Group. This information was reported yesterday by the Wall Street Journal.
The funding, which also included previous investors such as Kleiner Perkins Caufield & Byers, GGV Capital, Index Ventures and Union Square Ventures, actually concluded towards the end of last year. I’m not sure why the information was delay until now.
This Series D found of funding brought in $60 million. This latest round of funding SoundCloud may now be able to rid itself of the questionable legality of its content by paying to license music. The company has been able to stay under the radar until now.
However, since it has now reached $700 million valuation, it has become more visible. David Pakman, a venture capitalist and the former CEO of online music store eMusic, said "Given their size, they have no choice now but to get their massive amount of infringing music licensed.”
In October 2013, at Disrupt Europe, SoundCloud co-founder and CEO Alexander Ljung said that the company was focused on growth and engagement. That is one of the reasons why it simplified its premium offering. Ljung said, “The big thing when we made that change is that we went from four different account levels with a fairly wide range of pricing to two different levels with a smaller range.”
In an email statement, a spokeswoman for SoundCloud said, “This investment will allow SoundCloud to grow more rapidly in product, personnel and expansion in mobile efforts.” A blog post by IVP’s Somesh Dash and Dennis Phelps said, “Our core investment thesis for SoundCloud is centered around our belief that SoundCloud will become the dominant online digital delivery platform for audio in much the same way that YouTube (News - Alert) has become the dominant online platform for video.”
SoundCloud’s ultimate goal is to become the audio platform of the web, or the YouTube of audio. Just like YouTube, user-generated content remains at the startup’s core. I believe that the figures are that every minute, 12 hours of sound and music are uploaded to the platform.
With a free account, you can upload up to 2 hours of music, while the most expensive plan allows you to upload an unlimited amount of music for $12 a month or $135 per year. Subscriptions used to be much more expensive, and an unlimited plan was out of reach for many amateur artists.
You can see from the amount of growth that SoundCloud has shown so far, if it can eliminate all of it licensing issues, it is a very sound investment.
Edited by Cassandra Tucker
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