Music streaming app Gaana is raising $115 million from Chinese Internet investment company Tencent Holdings Ltd and Times Internet Ltd, the company said in a statement.
Gaana is operated by Gamma Gaana Ltd, a Times Internet subsidiary. Both Times Internet and Tencent will invest in the fund-raising, a company statement said, but did not provide a break-up. Gaana does not have any other investors on board.
With this investment, Tencent acquires a minority stake in Gaana, which was so far a wholly owned subsidiary of Times Internet.
Times Internet, a Times Group firm, intends to use the capital to further invest in artificial intelligence (AI)-related technology to personalize music experiences for consumers, to further develop its subscription services for paying users, and to develop aligned music experiences for Gaana users, the statement said.
Tencent is the majority shareholder of Tencent Music Entertainment, China’s largest music streaming business.
It also operates Joox, a leading music streaming platform in South-East Asia.
Gaana was incubated by the Times Group seven years ago and its mobile application has been a major driver of the 700% growth in consumption of the company’s Internet services in the last four years.
“We are happy to welcome Tencent as a partner to Gaana and benefit from their global learnings. Tencent operates the largest music streaming business in China, and we look forward to working closely with them to continue to innovate and drive the digital music market in India,” said Gautam Sinha, chief executive officer, Times Internet.
Prashan Agarwal, chief executive officer, Gaana, added that music streaming is the future of music consumption globally, and in India, music services like them are only 10% of the way towards building a business useful for 500 million Indians.
According to the FICCI-KPMG Media and Entertainment Industry Report 2017, streaming audio contributed 10% to the total mobile Internet usage in India. The year 2016 saw a spike in the music streaming volume with 50-60 million active monthly users on music streaming applications.
With over 300 million Internet-enabled mobile phones in the country and reducing tariff rates, this volume is expected to grow rapidly.
“Gaana is a leading music streaming platform in India, where millions of users stay tuned to its rich music library including its exclusive Bollywood content,” said Martin Lau, president of Tencent Holdings in a statement.
“As more affordable mobile data plans are driving smartphone penetration in India, we believe growth in the music streaming market will accelerate. By investing in and collaborating with Gaana, we look forward to bringing more innovation and better experiences to all Indian music lovers,” he added.
To be sure, streaming services have managed to revive the Indian music industry in the last few years, said Jehil Thakkar, partner at management consulting firm Deloitte India, especially with data penetration increasing with the entry of Reliance Jio and lowered data costs in the past twelve months.
“India is a virgin market as far as music streaming is concerned and independent players like Gaana still have to figure out a revenue model given that subscription services are yet to play out and advertisement revenue is small,” Thakkar said.
“By the time the Indian consumer learns to pay for content, there will be about two or three players entrenched in the market,” he added.
HT Media Ltd, which publishes Mint and Hindustan Times, competes with the Times Group.
Source: Mint