Soundcloud responds to reports suggesting site is “heading for bankruptcy”

The streaming platform issued a statement after a financial audit

Music streaming platform Soundcloud has posted a financial report, with many believing the company could be heading towards bankruptcy.

Earlier this week, Soundcloud published an official report, showing that revenues were not matching the amount of money spent on the service during 2014. The company also saw its administrative expenses increase by almost 68 percent.

According to the Financial Times, financial auditor KPMG, said that SoundCloud’s “material uncertainty” poises serious concerns for the company’s long-term viability. Even in the short term, it seems as though SoundCloud will have to seek outside investment, despite its position as the prominent upload and share music site.

In June last year, Soundcloud announced that it had signed licensing deal with over 20,000 independent record labels. Later on that year, in August,PRS For Music – the payments, copyright and remittance service for artists and music – confirmed that they would take legal action against SoundCloud.

The official statement on the company’s website reads:

“SoundCloud filed its 2014 accounts with Companies House. Beyond the full-year financials for 2014, which reflect those of a company in a strong growth stage, they show that, in 2015, we secured $77m of incremental capital, some of which came from our existing investors, demonstrating their belief in the future of the company, and the rest of which is a flexible credit line from Tennenbaum Capital Partners, an attractive option for companies like SoundCloud, who have a solid credit rating and are on a clear path to global success.

Since we began, we’ve been building a completely unique platform. SoundCloud users can discover more creators, at all stages of their careers, than anywhere else, and more music and audio: over 18 million creators are using the platform, sharing well over 110 million tracks, and reaching 175 million monthly active listeners. Additionally, comScore recently listed SoundCloud as being the 8th most popular app among millennials based on usage in the US.

Over the past year, we’ve continued to bring partners from the music industry onto SoundCloud. We’ve signed deals with PRS and UMG/UMPG, to add to the nearly 200 deals we’ve already signed, including those with Warner Music, Merlin and NMPA, as well as MCNs and independent creators. We’re focusing on enabling creators to get paid for their creativity, and on building a financially sustainable platform that our community can enjoy for years to come.

NMEPress