AI-powered speech and music recognition company SoundHound has closed a new $125 million loan facility, with what it says is, “$100 million fully-funded” at closing.
The credit agreement also allows SoundHound AI to potentially tap into additional capital of up to $25 million.
News of the loan facility, which has come from Atlas Credit Partners, follows SoundHound’s announcement that it had closed $25 million in preferred equity financing from a group of unnamed financial and strategic investors back in January.
That announcement arrived less than two weeks after the company was reported to have axed nearly half of its staff (200 people).
In an SEC filing on January 5, SoundHound confirmed that the company was reducing its workforce “by approximately 40%”.
SoundHound said on Monday (April 17) that this new strategic transaction completes its plans announced at the beginning of this year to refinance its current debt.
The company added that its new loan facility will enable it to replace its existing $30 million debt with “a more favorable structure that reduces the company’s cash outflows and extends the maturity date to 2027”.
Additionally, SoundHound said that the new funds provide it with “substantial incremental capital to drive further innovation and support the Company’s growth plans”.
SoundHound went public on the Nasdaq stock exchange in April 2022 after closing a $2.1 billion merger with special purpose acquisition company (SPAC) Archimedes Tech SPAC Partners.
According to SoundHound, the recent launches of its Dynamic Interaction and SoundHound Chat AI tools showcase “its ability to efficiently combine market advances with its best-in-class voice AI capabilities”.
“The clear intersection between demand for sophisticated Conversational AI and adoption of SoundHound’s category-leading technology stack with 17+ years of maturity has created a unique opportunity.”
Keyvan Mohajer, SoundHound
Union Square Advisors LLC and Cantor Fitzgerald & Co acted as financial advisors to SoundHound AI in connection with this credit facility.
Keyvan Mohajer, CEO and Co-Founder of SoundHound, said: “The clear intersection between demand for sophisticated Conversational AI and adoption of SoundHound’s category-leading technology stack with 17+ years of maturity has created a unique opportunity.
“Today, this potential has been acknowledged and underscored with a significant financial commitment from Atlas Credit Partners. Having this additional capital available will play a key role in setting SoundHound up for continued, long term success.”
“After meeting Keyvan and the SoundHound team, the sophistication of their voice AI, robust data, and technology stack made our decision to partner natural.”
Drew Mallozzi, Atlas Credit Partners
Drew Mallozzi, Chief Investment Officer and Managing Partner at Atlas Credit Partners, said: “Today’s announcement with SoundHound AI demonstrates our commitment to empowering technology leaders in their respective categories.
“After meeting Keyvan and the SoundHound team, the sophistication of their voice AI, robust data, and technology stack made our decision to partner natural.
“We believe our investment will help SoundHound AI to accelerate the pace at which they are redefining voice AI and enable them to further extend their global lead.”
Music Business Worldwide