Voice and music recognition company SoundHound has closed $25 million in preferred equity funding from an unnamed group of financial and strategic investors.
The announcement came on Tuesday (January 24), less than two weeks after the company was reported to have axe almost half of its employees (200 people).
In one SEC filings On January 5, SoundHound confirmed that the company is reducing “about 40%” of its workforce.
SoundHound says it closed its finances on Friday, January 20.
SoundHound said Tuesday that the investors in the latest funding are a mix of existing shareholders and new capital providers, adding that the preferred equity that investors The registered investment will be converted into Class A shares in the company.
SoundHound went public on Nasdaq stock exchange in April 2022 after closing a $2.1 billion merger with special purpose acquisition (SPAC) Archimedes Tech SPAC Partners.
The company added that preferred equity will be automatically converted on or after the one-year anniversary of the issue date if certain pricing conditions are met.
In addition to equity financing, SoundHound says it is also in the process of refinancing its existing debt with a new, minimally diluted facility that it says will provide incremental capital and defer current depreciation payments.
According to SoundHound, the refinancing, in addition to the company’s cost-reduction measures, is expected to result in operating cost savings of more than $60 million as the company is expected to have an operating cash flow positive GAAP activity by the end of 2023.
In the same release, the company gave an upbeat earnings outlook for 2022, projecting around $31 million in revenue, at the high end of previous guidance and gross margin. exceed 70%.
“SoundHound believes that growing market demand and significant advances in technology are enabling the explosion of conversational AI and SoundHound’s next-generation products and services are at the heart of the conversation.” this revolution.”
Sound Hound
Revenue growth in 2023 is forecast to increase by about 50% year-on-year, thanks to the company’s solid customer base and more than $300 million booking platform, the report said.
SoundHound also attributes this year’s predicted strong results to growing demand for voice AI-enabled customer service products.
In 2022, the company made a number of key partnerships and integrations, including an agreement with Qualcomm that allows SoundHound’s voice AI to be integrated with Snapdragon platforms.
The company also expanded its partnership with Snap and made new deals with VIZIO, Square, and Toast.
In May 2022, SoundHound signed a 7-year agreement with Hyundai to bring SoundHound’s Edge+Cloud voice AI technology, music recognition software, voice commerce solutions, and multilingual conversational intelligence on a number of Hyundai models globally.
Two months later, SoundHound announced a similar partnership with Stellantis, formed from the merger of Italian-American carmaker Fiat Chrysler Automobiles and France’s Peugeot.
Other partnerships over the past year have been with LG, HARMAN International, DPCA and DMI.
In 2019, SoundHound cooperate with Pandora to launch voice control on the Pandora app.
“SoundHound believes that growing market demand and significant advances in technology are enabling the explosion of conversational AI and SoundHound’s next-generation products and services are at the heart of the conversation.” this revolution,” the company said.
SoundHound’s equity financing and debt refinancing comes as SoundHound, like other tech companies, weathers the current macroeconomic downturn.
“When we start going public in early 2021, high-tech companies like SoundHound are the darling of the investor community,” CEO Keyvan Mohajer is quoted as saying by the technology news agency. Gizmodo as said in an internal email.
“Companies that can achieve high growth, despite high costs, are seen as the engine of the future economy. However, due to changing economic conditions, including high interest rates, rising inflation and recession fears, companies with our profile have become much less attractive,” added Mohajer. .
Global Music Business
