SoundCloud could reach valuation exceeding $1.2 billion with new funding

SoundCloud is now in discussions to raise up to $150 million in new financing. The injection should see the audio platformreach a valuation which exceeds $1.2 billion, according to two people in the know.

Founded by Chief Exec Alexander Ljung and CTO Eric Wahlforss in 2007, SoundCloud was formed as an audiophile’s equivalent to YouTube and has been attracting more than 175 million unique listeners every month, with content creators uploading approximately 12 hours of audio every minute.

The Berlin-based company is now raising significant capital whilst it attempts to ink licensing agreements with major record labels and compete with rivals like Spotify and Beats Music.

Unlike other music streaming services, SoundCloud charges monthly subscription fees based on upload volume, and relies on the creators for revenue. This year has seen the service begin to show ads to consumers, with plans to launch a subscription service next year.

Whilst SoundCloud has struggled to lock down key agreements with the major record labels, it still promotes their records and acts as a scoutfor new talent. Warner Music remains the only major to have inked a licensing agreement as a Premier Partner while Sony and Universal remain disillusioned with the service’s latent attempts to monetise their array of songs that exist in both complete forms and user constructed remixes and mash-ups.

As labelexecutives eye SoundCloud’s business model with concerns regarding its logistics, the possibility of such a large cash infusion will provide the service with more leverage to negotiate deals with the evasive majors.