SoundCloud will use this additional investment to accelerate its product development and enhance services.
“SoundCloud’s three consecutive years of strong financial performance directly reflect the success of our creator-led growth strategy,” said Kerry Trainor, CEO, SoundCloud. “We have an exciting roadmap focused on deepening the connections between creators and listeners that fuel creator discovery, career growth and the evolution of music culture on SoundCloud.
“We've built a great relationship with SiriusXM through our highly successful Pandora ad sales agreement, and their investment gives us added capital flexibility to accelerate our vision and take advantage of strategic opportunities as they arise.”
“SoundCloud’s unique platform serves a vital role in today’s music ecosystem where new artists are discovered and build their fan base, and established artists experiment and connect directly with their fans in highly effective ways,” said Jim Meyer, CEO of SiriusXM. “We admire SoundCloud’s loyal and growing audience, its offering for creators, and its reputation and popularity in global music communities. We believe this is another opportunity to continue creating value for SiriusXM stockholders by investing in expanding digital audio platforms.”
The minority investment follows the ad sales relationship between SoundCloud and Pandora, a subsidiary of SiriusXM, which started in 2019.
In 2019, SoundCloud claimed all-time highs for platform engagement, creators heard, subscribers and revenue. The company reported a $200m (£155m) forward revenue run-rate for the first time in the fourth quarter 2019.
Under the terms of the agreement, SiriusXM has purchased $75 million of securities for a minority investment, and the SoundCloud board of directors will expand to include two individuals designated by SiriusXM.
The Raine Group served as financial advisor to SoundCloud, and Morrison & Foerster as its legal counsel. Allen & Company LLC served as financial advisor to SiriusXM, and Weil, Gotshal & Manges LLP as its legal counsel.