This is the first round of institutional financing for the company, which was founded in 2007 and raised seed financing from music producer Chris Zippel, the founders of music production software company Ableton, and four internet entrepreneurs.

Stefan Tirtey, a partner at Doughty Hanson, says, ‘We believe that Soundcloud has the potential to revolutionize the production and distribution process for digital music.’

SoundCloud, which allows music professionals to send and receive large audio files without cluttering their email inbox, launched its service in October and has 10,000 registered users.