2016 is upon us, and with the turn of the new year comes the memory of a distant claim made by streaming site Soundcloud about the addition of a new, paid service to be launched sometime in the coming months. Unfortunately for the company, this new development will have to take place while they simultaneously attempt to climb out of a $56.5 million pool of losses experienced during 2014.
According to new UK filings, Soundcloud’s losses almost equated the $60 million of investment money raised last year. Their revenue for the time reached $25 million in the same year. The impact of these numbers will result in at least another three years of being in the red, despite the service raising over $35 million earlier this year.
“Our overhead base has increased faster than our revenues. After making inquiries, the Directors have concluded that they have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future. However, the Directors have concluded that there are material uncertainties facing the business. The Group’s business plan shows that further capital investment will be required in the next 12 months to fund the business.” [emphasis ours]
It is not uncommon for a business to operate in the red from year to year, and many do so quite successfully. Soundcloud has just recently penned a deal with Universal Music Group, one of the three major labels, so hopefully that can offset any losses or, even better, provide some additional revenue.