As originally reported by Axios, the company is said to have circulated a "do-or-die" reorganisation proposal to shareholders in order to secure funding from boutique merchant bank The Raine Group and Singapore's state investment firm Temasek.
SoundCloud will be led by a new executive team led by former Vimeo CEO Kerry Trainor who succeeds founder Alex Ljung as chief executive and Michael Weissman, another former executive at the video platform, who was named SoundCloud's chief operating officer. If accepted, then the new investment - $169.5 million at a $150 million pre-money enterprise valuation - also closes tomorrow.
"By reducing our costs and continuing our revenue growth, we're on our path to profitability and in control of SoundCloud's independent future", said Ljung after the layoffs. As well, many wondered what would happen to global music culture after a potential loss of the unique ecosystem cultivated by SoundCloud's free-for-all-style strategy.
According to Variety, the Raine Group investment is said to have been spearheaded by Fred Davis, a former EMI music exec and advisor to companies like Spotify, Shazam, and YouTube.
The backing also brings some new faces to SoundCloud.
Now, according to the USA news and information website Axios' Dan Primack, a circular has been sent to existing SoundCloud shareholders, which requires them to accept or reject a reorganisation proposal by the end of the day. Now, we have slightly more information about what to expect.
Outgoing CEO and SoundCloud co-founder Alexander Ljung takes up the position of Chairman of the company's board.
SoundCloud is closing in on a Hail Mary deal that is meant to guarantee the company's financial survival and give it a chance to pay down its debt, but comes with some serious sacrifices for existing investors. Its investment activities are guided by four investment themes and the long term trends they represent: Transforming Economies; Growing Middle Income Populations; Deepening Comparative Advantages; and Emerging Champions.