SoundCloud closes €2.5M financing round

Funding

SoundCloud, an Internet site that enables professional musicians to send, receive and distribute music, has secured an investment of €2.5 million from Doughty Hanson Technology Ventures in its first round of venture capital funding.

SoundCloud makes it possible for music professionals to privately exchange music, allowing for easy collaboration and communication prior to a public release. Musicians can send and receive studio-quality tracks without cluttering up their email inbox, needing to make use of generic file sending services or having any specialist technical expertise.

SoundCloud was founded in 2007 and raised seed financing from business angels including Christophe Maire and Peter Schüpbach, founders of music production software Ableton AG, music producer Chris Zippel, and internet entrepreneurs Tariq Krim and Felix Petersen. The company launched its service in October 2008 and since then has attracted more than 100,000 registered users.

Alexander Ljung, Co-Founder and CEO, said, “SoundCloud’s business proposition is based on bringing web innovation to the music industry and empowering those who create and promote music globally. Doughty Hanson demonstrated early on a clear understanding both of our business proposition and of the music industry.”

Stefan Tirtey, a partner at Doughty Hanson Technology Ventures, who joins the Board of SoundCloud, said, “SoundCloud has all the qualities we look for in a business: a solid product solving a real problem, a proven business model, and a capable and ambitious founder team. We believe that SoundCloud has the potential to revolutionise the production and distribution process for digital music and this funding will enable the company to build on its success to date and to exploit its significant global growth potential.”