SoundCloud Raises $50 Million

SoundCloud, a platform for recording and sharing music online, has just completed a round of funding led by Kleiner Perkins Caufield & Byers with participation from GGV Capital.  The dollar amount was undisclosed, but according to the press release, the funds were raised to allow for further expansion and scaling for mobile and international markets. TechCrunch believes the amount is $50 million and that “SoundCloud’s founders Alexander Ljung and Eric Wahlforss are gunning to do what YouTube did in video, but for audio.”

SoundCloud is already a handy tool for unsigned bands looking to share samples of their music without having to deal with unwieldy files. The company connected with the cloud-based creative suite Aviary in June 2010 and added its own “record” button later that year. With an active online community and a laundry list of social media site connections including Facebook, Tumblr, Foursquare and Twitter, SoundCloud was in many ways the best thing to happen to indie musicians since MySpace.

But considering that Pandora already allows new artists to apply to join the ranks of more established artists in its music catalog, and that more democratic Internet radio stations like Grooveshark and Last.fm have no barriers to entry at all, the challenge for SoundCloud will be to draw listeners in instead of sending artists out.

Then again, the tool shares one other quality with YouTube:  SoundCloud’s community members can download samples from other artists and create derivative works.  On SoundCloud artists have a range of options for protecting their copyrights – or not – from those who would share, perform or alter their music tracks.  The result is an ever-evolving landscape of samples and remixes made from songs that are protected with “some rights reserved” by a Creative Commons license. Other music streaming services like Spotify have Digital Rights Management (DRM) restrictions to prevent piracy.

Which brings us to KPCB partner Mary Meeker, who will join SoundCloud as a board observer.  In addition to serving on the board of the mobile credit card-swiping company Square, Meeker is involved with the firm’s other social media investments, which include Spotify.

Said SoundCloud co-founder and CEO Alexander Ljung in a statement, “Mary Meeker showed very clearly in her recent State of the Internet 2011 presentation that sound is the next frontier on the Web.”

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