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SoundCloud gets a $70 million lifeline

A new debt round.

DLD Conference 2012 - Day 2
SoundCloud CEO Alex Ljung
Nadine Rupp / Getty
Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

After looking for an investor or a buyer, SoundCloud has settled for a lender: The music service has raised a $70 million debt round.

The new funding comes after SoundCloud has spent many months looking to raise $100 million or more, or sell the company. Business Insider first reported the round.

Glass half-empty spin: It would have been a more promising sign for the company if they could have found an equity investor.

Glass half-full: New investors think there’s at least enough value there to cover their loan. They’ll get paid first if SoundCloud sells.

Here’s the comment from a SoundCloud rep: “We are pleased to have secured a flexible $70 million credit line from Ares Capital, Kreos Capital and Davidson Technology that is ideally structured for a company with our strong credit rating and in our stage of growth. This new funding will enable SoundCloud to strategically grow our technology and personnel resources to fuel our expected 2.5 times year-over-year growth in 2017, while building a financially sustainable platform on which our connected community of creators, listeners and curators can thrive for years to come.”

And for more on the pros and cons of debt deals, read this post from Union Square Ventures’ Fred Wilson, an early SoundCloud backer. As wise Gabe Rivera notes, Wilson wrote this one shortly after SoundCloud’s debt deal.

This article originally appeared on

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