Cash-strapped SoundCloud gets new funds and top management

FRANKFURT (Reuters) – SoundCloud, the world’s hottest streaming music app, however one which has struggled to discover a worthwhile enterprise mannequin, stated it acquired new funding on Friday, insulating it from doubtlessly working out of money this yr.

The corporate, which laid off 40 % of its employees in July, stated in a weblog submit that the financing was raised from media-focused funding financial institution Raine Group of New York and Singapore’s sovereign wealth fund Temasek [TEM.UL].

It didn’t disclose the quantity or its phrases. Raine and Temasek weren’t instantly out there for remark.

One supply aware of the funding stated it amounted to round $170 million (144 million euros), as reported on Thursday by on-line information web site Axios, which had obtained the deal’s time period sheet.

The corporate stated that as a part of the new funding, digital media veterans Kerry Trainor and Michael Weissman, respectively the previous chief govt and chief working officer of on-line video service Vimeo, would take the identical roles at SoundCloud.

The arrival of the previous leaders of Vimeo – one of many greatest on-line video rivals to Google’s YouTube (GOOGL.O) and Fb (FB.O) – raises the prospect SoundCloud might evolve past audio streaming in a extra music video-oriented route.

SoundCloud founder and former CEO Alexander Ljung has agreed to step apart to turn into chairman of the board, it stated. Co-founder and Chief Expertise Officer Eric Wahlross will stay on the firm as chief product officer.

In July, SoundCloud fired 173 staff and closed its London and San Francisco places of work to concentrate on Berlin and New York. A spokeswoman for SoundCloud stated final month it remained absolutely funded into the fourth quarter, whereas declining to touch upon what lay past.

“The funding will guarantee a powerful, unbiased future for SoundCloud, funding deeper growth and advertising of its core instruments utilized by tens of millions of audio creators – musicians, DJs, producers, labels, managers and podcasters,” SoundCloud stated.

Again from the Brink

SoundCloud stays the world’s hottest free music cellphone app, with roughly 88 million energetic customers, in line with on-line viewers monitoring agency SimilarWeb. It’s supported partly by promoting, with solely a small chunk of listeners paying charges.

In its weblog submit, the decade-old, Berlin-based firm stated that at present gross sales ranges, it was on observe to greater than double its income to $100 million over the following 12 months.

However SoundCloud has struggled to develop a listener subscription enterprise mannequin to pay hefty royalties and compete with streaming music leaders Spotify, in addition to encroaching rivals Apple (AAPL.O) and Amazon (AMZN.O).

Axios reported the time period sheet circulating amongst current traders since Tuesday set Friday as a deadline to conform to the new funding construction. It cited Ljung saying that in any other case, SoundCloud wouldn’t give you the option “to proceed as a going concern”.

Raine Group has been an energetic U.S. investor in media and leisure properties. Temasek has been one of many world’s most energetic expertise traders, backing roughly 90 corporations within the sector stretching again to the dot-com period.

Goldman: bond trading revenue slumps 40 percent

Goldman Sachs Group Inc reported a 40 percent drop in bond trading revenue throughout its second-quarter earnings, mirroring a broader weak point in trading exercise that has plagued huge U.S. banks.

Total revenue was roughly flat, nevertheless, as beneficial properties in investing and lending and asset administration helped offset the trading hunch, and the financial institution topped Wall Road earnings estimates.

Goldman’s revenue from trading mounted earnings, foreign money and commodities fell to $1.16 billion from $1.93 billion the identical quarter a yr earlier, when trading exercise had surged across the Brexit vote.

The fifth-largest U.S. financial institution by property is often extra reliant on bond trading revenue than its friends and has remained dedicated to the enterprise at the same time as others backed away amid elevated regulatory scrutiny for the reason that 2007-2009 monetary disaster.

Goldman’s decline in bond trading was far worse than JPMorgan Chase & Co’s 19 percent fall and Citigroup Inc’s 6 percent drop, resulting in Goldman’s weakest fixed-income outcomes for the reason that fourth quarter of 2015.

A few of Goldman’s different companies carried out higher, together with equities which rose eight percent to $1.89 billion to mark its finest outcomes for the reason that second quarter of 2015.

Investing and lending, which incorporates investments Goldman makes throughout the financial institution, jumped 42 percent.

The financial institution has been working to chop its reliance on trading and shift to extra steady companies like funding administration. That division generated revenue of $1.53 billion, up 13 percent from the year-ago quarter.

A view of the Goldman Sachs stall on the ground of the New York Inventory Alternate July 16, 2013.Brendan McDermid/File Photograph

Goldman’s earnings per share rose to $three.95 because the variety of shares excellent fell practically 6 percent. It topped analysts’ common estimate of $three.39 per share, in response to Thomson Reuters I/B/E/S.

Funding banking revenue fell three percent to $1.73 billion as dealmaking and capital elevating slowed barely.

The financial institution has additionally pushed into shopper lending, launching a web based platform known as Marcus in 2016.

The Wall Road financial institution’s web earnings relevant to widespread shareholders was practically flat at $1.63 billion within the quarter.

Whole revenue, together with web curiosity earnings, fell zero.6 percent to $7.89 billion.

Goldman’s working bills fell about 2 percent to $5.38 billion.

The lender’s return on fairness was eight.7 percent. Analysts usually prefer to see a financial institution produce returns of at the very least 10 percent to satisfy its value of capital.

Shares of Goldman, a Dow element, had been down zero.6 percent in premarket trading. The inventory has been the worst performing amongst shares of the six massive U.S. banks. As much as Monday’s shut, it had misplaced four.three percent in worth this yr, considerably underperforming the broader S&P 500 Monetary Index, which has gained 6.7 percent. The corporate’s arch rival Morgan Stanley is predicted to report outcomes on Wednesday.

Reporting by Sweta Singh in Bengaluru and Olivia Oran in New York; Modifying by Sriraj Kalluvila and Meredith Mazzilli

Uber rival Grab raising $2 billion from SoftBank

Uber Applied sciences Inc’s [UBER.UL] greatest rival in Southeast Asia, is raising as a lot as $2 billion in funding from Japan’s SoftBank Group (9984.T) and China’s high ride-hailing agency Didi Chuxing, the Wall Road Journal reported on Friday.

The deal, which might shut within the subsequent few weeks, would worth Singapore-based Grab at greater than $5 billion, the Journal reported, citing individuals accustomed to the matter.

The reported funding comes amid efforts by Grab to remodel right into a shopper expertise agency that additionally affords loans, digital cash switch and money-market funds.

Grab declined to remark, whereas SoftBank and Didi didn’t instantly reply to Reuters requests for remark.

Grab, which operates its ride-hailing platform in 55 cities throughout seven international locations, raised $750 million in a funding spherical in September, with sources then valuing the five-year-old startup at over $three billion.

The reported deal additionally comes at a time when San Francisco-based Uber, the world’s largest ride-hailing service, faces setbacks at residence ranging from accusations of a sexist work tradition and driver protests.

Uber’s challenges have culminated within the departure of co-founder and CEO Travis Kalanick, who stepped down underneath investor strain final month.

Snap shares draw bullish options bets after slipping below IPO price

NEW YORK (Reuters) – Options merchants have been inserting bets this week that shares of Snap Inc (SNAP.N) have been primed for a rebound after slipping below their preliminary public providing price of $17.

Shares of the Snapchat mum or dad have slumped since a red-hot March IPO, falling below their preliminary sale price on Monday and hitting a report low of $15.21 two days later after a lead underwriter downgraded its ranking on the inventory.

Merchants within the options market have responded to the newest drop in Snap shares as a possibility to load up on name options, mentioned Fred Ruffy, analyst at New York-based options Analytics agency Commerce Alert.

Calls convey the fitting to purchase shares at a hard and fast price sooner or later and often are used to position bets on shares rising, whereas put options give the fitting to promote shares at a sure price sooner or later.

Name options betting on Snap shares topping $16 by mid-October have been probably the most actively traded contracts this week, adopted by contracts on the lookout for the shares to maneuver above $17 by July 21, based on Commerce Alert knowledge.

“Shopping for curiosity in name options with strike costs above the present inventory price is commonly an indication that gamers are positioning for a short-term transfer larger within the inventory,” mentioned Ruffy.

Whereas open put contracts nonetheless outnumbered calls, pointing to important bearish positioning, that options-based measure of sentiment has grow to be much less defensive this week.

There are 1.three places open for every open name, the fewest since mid-Might and down from 1.5 places on Monday, Commerce Alert knowledge confirmed on Thursday.

Snap shares have been up three % to $15.71 on the day after brokerage Stifel upgraded its ranking on the shares to “purchase” from “maintain” and reaffirmed a $22 price goal.

“We imagine Snap’s enterprise stays on observe essentially because it continues to develop revolutionary client merchandise and more and more refined instruments for advertisers,” Stifel analysts mentioned in a notice.

Snap’s shares took a tumble in early Might after the corporate reported slowing consumer progress and income in its first earnings report as a public firm.

Traders are additionally eyeing the expiration later this month of a lockup interval that has up to now restricted firm insiders and IPO backers from promoting Snap shares.

Analysts at Stifel, nonetheless, mentioned that investor considerations in regards to the looming finish of the lockup interval might have extra of an influence on the share price than any precise insider promoting after the expiry.