SoundCloud

SoundCloud
Type	Private
Founded	August 27, 2007
Founder	Alexander Ljung, Eric Wahlforss
Headquarters	Berlin, Germany
Industry	Music streaming, Audio distribution, Social media
Products	Music streaming, Audio hosting, Podcast hosting, SoundCloud Go, SoundCloud Go+, Next Pro
Services
Key people
Parent
Subsidiaries
Website	soundcloud.com

SoundCloud is a German online audio distribution platform and music streaming service headquartered in Berlin, Germany. Founded in 2007 by Alexander Ljung and Eric Wahlforss, SoundCloud is one of the largest music streaming services in the world and is available in 190 countries and territories. Unlike traditional streaming services, SoundCloud places a strong emphasis on user-uploaded content, allowing independent artists, musicians, podcasters, and creators to share audio directly with a global audience without the need for a record label or distributor.

With over 400 million tracks from 40 million artists, SoundCloud positions itself as an artist-first platform empowering creators to build and grow their careers by providing them with progressive tools, services, and resources.

History

Founding (2007–2008)

On August 27, 2007, Swedish sound designer Alexander Ljung and Swedish electronic musician Eric Wahlforss founded SoundCloud in Berlin. The website for SoundCloud was launched on October 17, 2008.

It was originally intended to allow musicians to collaborate by facilitating the sharing and discussion of recordings, but later transformed into a publishing tool for music distribution. According to Wired magazine, soon after its inception, SoundCloud began to challenge the dominance of Myspace as a platform for musicians to distribute their music.

Early Growth (2009–2013)

In April 2009, SoundCloud received €2.5 million Series A funding from Doughty Hanson Technology Ventures. In May 2010, SoundCloud announced it had one million users. In January 2011, it was reported that SoundCloud had raised US$10 million Series B funding from Union Square Ventures and Index Ventures. On June 15, 2011, SoundCloud reported five million registered users and investments from Ashton Kutcher and Guy Oseary's A-Grade Fund, and on January 23, 2012, it reported 10 million registered users.

In July 2013, SoundCloud had 40 million registered users and new users were joining at 20 million per month.

Licensing Negotiations and Twitter Partnership (2014–2015)

SoundCloud announced in January 2014 that it had commenced licensing negotiations with major music companies to address unauthorized, copyrighted material regularly appearing on the platform. The announcement followed a round of funding in which US$60 million was raised, resulting in a $700 million valuation.

In March 2014, Twitter announced it would partner with SoundCloud in developing its first integrated music app. However, the project never moved forward because SoundCloud could not accommodate licensed music due to a lack of necessary arrangements with music labels.

In May 2015, reports emerged that Twitter was considering acquiring SoundCloud for approximately $2 billion, though the acquisition never materialized. In September 2016, Spotify was also reported to be exploring a purchase of SoundCloud, but abandoned those efforts by December 2016.

SoundCloud Go and Financial Difficulties (2016–2017)

On March 29, 2016, SoundCloud unveiled SoundCloud Go, a subscription-based music streaming service providing an ad-free experience, offline playback, and licensed music from major labels integrated into the existing user-uploaded content of the service.

In early 2016, SoundCloud reached licensing deals with Universal Music Group (UMG) and Sony Music Entertainment, which limited certain material to paid subscribers. The deal with UMG, a company that had once declared SoundCloud a "pirate site," gave UMG the right to directly take down any files on SoundCloud that violated its copyright.

On February 28, 2017, SoundCloud renamed its main Go plan SoundCloud Go+, adding a secondary tier titled SoundCloud Go at a US$5 price point, which does not include the licensed music library but still offers ad-free and offline playback.

By mid-2017, SoundCloud faced a severe financial crisis, laying off approximately 40 percent of its global workforce. The Raine Group and Temasek Holdings acquired a majority stake in the company for approximately US$170 million, stabilizing operations and preventing a potential shutdown.

Recovery and Profitability (2018–2024)

In 2021, SoundCloud overhauled its royalty distribution model. Under the new model, royalties are awarded on the basis of subscription and advertising revenue, as opposed to the number of streams. This fan-powered royalty system was widely praised as a fairer and more transparent approach to compensating independent artists.

In 2022, SoundCloud had to let go of 20 percent of its employees worldwide to cope with the economic consequences of the COVID-19 pandemic. In May 2023, a further 8 percent of full-time positions were cut in order to meet the owners' profit targets.

SoundCloud achieved positive EBITDA in 2024, marking its first sustained period of profitability. The two main shareholders approached investment banks in early 2024 to prepare a possible sale of SoundCloud, with the Berlin-based company valued at approximately EUR 1 billion.

Recent Developments (2025)

On September 15, 2025, it was announced that the MP3 and Opus audio formats would be deprecated on November 15, 2025, and replaced by 96 kbit/s and 160 kbit/s AAC via HLS, as part of efforts to provide a standardized experience across various devices and operating systems.

In 2025, SoundCloud also deployed generative AI remix tools and added new social features allowing users to connect with friends and favorite artists. The platform partnered with Imogen Heap's Auracles on an artist data platform and expanded to connected TV through a partnership with Norigin Media.

Features

Audio Uploading and Sharing

SoundCloud's core feature allows any registered user to upload audio files and share them publicly or privately. Tracks are displayed with a distinctive waveform visualization that allows listeners to leave timestamped comments at specific points in a recording, fostering direct interaction between creators and their audience.

Free and Subscription Tiers

SoundCloud offers both free and paid membership tiers. Free users can stream content with advertisements and limited monthly listening time. Paid tiers include:

SoundCloud Go — Ad-free listening and offline playback at US$5 per month.
SoundCloud Go+ — Full licensed catalog access, ad-free listening, offline playback, and 256 kbit/s audio quality at US$10 per month.
Next Pro — Designed for musicians, Next Pro subscribers can upload unlimited audio files, access enhanced analytics, distribute their music to other streaming platforms, and access tools to reach larger audiences, available for US$99 per year.

Fan-Powered Royalties

Introduced in 2021, SoundCloud's fan-powered royalty system distributes royalties based on the actual listening habits of each individual subscriber, rather than pooling all streams together. This means that a subscriber who only listens to independent artists directs their subscription revenue toward those artists directly, rather than subsidizing major label content.

Podcasts and Audio Content

In addition to music, SoundCloud hosts a significant volume of podcasts, DJ mixes, sound effects, spoken word recordings, and other non-music audio content. This breadth of content distinguishes it from purely music-focused streaming services.

Social Features

SoundCloud incorporates social networking elements including user profiles, followers, reposts, likes, and playlists. Artists can connect directly with fans, and listeners can share tracks across other platforms. In 2025, SoundCloud expanded its social features to allow users to connect more directly with friends and favorite artists.

Cultural Impact

SoundCloud Rap

SoundCloud played a pivotal role in the rise of a hip-hop subgenre widely known as SoundCloud rap. SoundCloud was especially popular with hip-hop artists and fans, leading to the rise of a genre dubbed SoundCloud rap. SoundCloud rappers developed their own sound and subculture. Songs often featured lyrics that were repetitive, unclear, or technically distorted, and many emcees sported striking facial tattoos and brightly dyed hair. SoundCloud rap was the hip-hop of Generation Z, and its attitude, fashion, and do-it-yourself ethic led some to recall the punk revolution in rock.

SoundCloud rappers Lil Uzi Vert and Post Malone went on to massive mainstream success. Tragically, some of the biggest names in SoundCloud rap died as their careers were just beginning. XXXTentacion was only 20 years old when he was murdered in 2018, and Juice WRLD died of an accidental drug overdose days after his 21st birthday in 2019.

Artist Discoveries

SoundCloud has been credited with launching or amplifying the careers of many major artists. Billie Eilish released her debut song, "Ocean Eyes," on SoundCloud in 2015 at just age 13 — the song went viral overnight. Other artists who gained early exposure through SoundCloud include Chance the Rapper, Post Malone, and Lorde.

Ownership and Funding

SoundCloud has raised a total of $438 million in funding over 10 rounds from investors including Twitter, Index Ventures, and Union Square Ventures. Following its near-collapse in 2017, The Raine Group and Temasek Holdings became its majority shareholders. US satellite radio provider SiriusXM, which also owns music streaming service Pandora, bought a minority stake in SoundCloud in 2020 with a $75 million investment.

External Links