Chinese Internet conglomerate Tencent Holdings Ltd has made another bet in India. This time, it has led a $115-million (Rs 748 crore) round into music streaming service Gaana. Times Internet, which incubated the digital music company, also participated in the round, a company statement said.
Gaana will use the capital to further invest in artificial intelligence, develop its subscription product, and to create aligned music experiences for Gaana consumers, the statement added.
“As more affordable mobile data plans are driving smartphone penetration in India, we believe growth in the music streaming market will accelerate,” Martin Lau, president of Tencent Holdings, said in the statement.
Gaana claims that it crossed 60 million monthly active users in December 2017.
The digital music firm last secured funds in October 2015 from mobile phone maker Micromax Informatics Ltd, which had invested an undisclosed amount.
Times Internet Ltd (TIL) is the digital business arm of media conglomerate Bennett, Coleman and Company Ltd (BCCL) that runs several market-leading newspapers such as The Times of India and The Economic Times as well as TV news channels. TIL typically make investments from its own resources or from deep-pocketed BCCL, so the Gaana fundraise is the first external venture capital funding for the group.
In 2016, TIL shelved its plans to raise external VC funding for its real estate portal MagicBricks. MagicBricks was led on to raise funds due to the massive growth of Housing.com in 2015. However, the company scrapped its fundraising plans as the competitive pressure, which spiked in early 2015 in the real estate sector, blew away over a period of time, TIL’s chief executive Gautam Singh had told TechCircle in 2016.
In India, Gaana's rivals include the heavily funded Saavn, Bharti Airtel's Wynk, Hungama, and Jio Music.
In July 2015, Saavn had raised $100 million in Series C funding from existing investor Tiger Global Management and others. In June 2016, it secured investment from Guy Oseary, CEO of talent management agency Maverick Records.
Besides local players, Gaana also competes with international music streaming services such as Spotify, Amazon Music and Apple Music.
Last week, tech news publication BGR India reported that Swedish music streaming service Spotify opened an office in India last year and is expected to launch its service in the country soon.
Amazon India on Wednesday launched its ad-free music streaming service Prime Music, which will be available to subscribers of Amazon Prime.
For its Prime Music service, Amazon India has partnered with international and domestic music publishers to deliver content to its Indian customers. Warner Music Group, Zee Music and Saregama are some publishers it has tied up with. It will also produce its own original music. The US-based e-tailer recently increased the annual membership fee for Prime to Rs 999 from the inaugural offer of Rs 499.
Tencent’s India investments
Tencent is the majority shareholder of Tencent Music Entertainment, China’s largest music streaming business. It also operates Joox, a music streaming platform in Southeast Asia.
Tencent’s last investment in India was in cab-hailing company Ola. The Chinese conglomerate led a $1.1-billion (Rs 7,174 crore) round into the homegrown firm in October last year, along with Japanese telecom and Internet conglomerate SoftBank Group and other investors.
Tencent was also part e-commerce major Flipkart’s $1.4-billion (Rs 9,000 crore) fundraise in April last year, which saw US online retailer eBay and software giant Microsoft Corp participate in the round.
In India, Tencent competes with Chinese e-tailing giant Alibaba, which is the largest stakeholder in digital wallet firm Paytm, and Japan’s SoftBank Group.