Chinese internet giant Tencent is continuing to put its money in India and in music streaming services after it agreed to lead a $115 million investment in India’s Gaana.
Gaana is a music streaming service that was started by Times Media, the company behind the Times of India newspaper and tech incubator Times Internet among other things, seven years ago. Gaana didn’t reveal its user metrics, but CEO Prashan Agarwal said the company is “only 10% of the way towards building a business useful for 500 million Indians.”
Times Internet is already an existing backer and it is the other investor in the deal. Tencent’s involvement represents the first ‘outside’ investment money raised for Gaana, which counts Saavn — a firm that raised money from Tiger Global and others — and Xiaomi-backed Hungama among its competition.
Spotify has spent the past year assessing the Indian market over a potential move, sources close to the company told TechCrunch. But, with a U.S. public listing happening at the end of March, it isn’t likely to make the move soon.
Tencent’s investment in Gaana follows a deal with Spotify which saw both companies swap shares in December. Tencent Music Entertainment (TME), the Chinese firm’s subsidiary that manages its music streaming and karaoke services, made an undisclosed minority investment in Spotify through new shares, while Spotify bought a similar undisclosed stake in TME. Added to that, Tencent bought into Spotify by purchasing secondary shares.
While not as prolific as arch-nemesis Alibaba, Tencent — which recently became Asia’s first $500 billion company — has steadily upped its investment in India in recent times. Companies in the country that it has backed include chat app Hike, Amazon rival Flipkart, Uber competitor Ola, medical platform Practo, and education startup BYJU’s.
Given its other music businesses and investments — which include Joox in Southeast Asia and karaoke app Smule — and the fact that TME is widely-tipped to head for an IPO this year, it isn’t a huge surprise to see Tencent expand its India focus with this move into music streaming.
“We are happy to welcome Tencent as a partner in 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,” Gautam Sinha, CEO Times Internet, said 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,” added Tencent President Martin Lau.
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