Cash-strapped SoundCloud receives new funding; CEO to step aside

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FRANKFURT (Reuters) – SoundCloud has received a “substantial” new round of investment, the company said on Friday, insulating the popular online music streaming service from potentially running out of cash later this year, after laying off 40 percent of its staff in July.

The company said in a blog post that the new financing round was raised from media-focused investment bank Raine Group of New York and Singapore’s sovereign wealth fund Temasek [TEM.UL], without disclosing the amount of the funding or other terms.

One source familiar with the new stake said the investment amounted to around $170 million (144 million euros) as reported on Thursday by Axios, which had obtained the deal’s term sheet.

The company said that as part of the new investment, digital media veterans Kerry Trainor and Michael Weissman, respectively the former chief executive and chief operating officer of online video service Vimeo, would take the same roles at SoundCloud.

SoundCloud founder and former CEO Alexander Ljung has agreed to step aside to become chairman of the board, it said.

Reporting By Eric Auchard; Editing by Edward Taylor