Chinese Internet giant – Tencent – is bullish on the Indian digital sector, and thus, has agreed to lead a $115 million funding round for the Indian music streaming service – Gaana. This Spotify-like service was launched seven years back by an internet-focused subsidiary of the Times of India Group.
Gaana will use the new funds to improve its artificial intelligence capabilities and develop better personalized services and features for its users. The music streaming service also plans to develop its paid-user service, notes TechCrunch. The company offers a free ad-based service along with a Spotify-like subscription offering.
According to Gaana, its monthly active user base was over 60 million in December. In comparison, Spotify in June said that its monthly active users stood at 140 million. Spotify has reportedly been considering an Indian debut, but with its U.S. public listing date approaching, it has possibly postponed it, notes TechCrunch.
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“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 Times Internet CEO, Gautam Sinha, in a statement.
Times Internet, an internet-focused subsidiary of the Times of India Group, is another investor in the deal. Tencent is the first outside investor for Gaana. Other Indian-based music services had already attracted foreign money. For instance, Saavn has gotten funding from Tiger Global, and Hungama is backed by Xiaomi, according to TechCrunch.
“As more affordable mobile data plans are driving smartphone penetration in India, we believe growth in the music streaming market will accelerate,” said the president of Tencent Holdings, Martin Lau, in a statement, according to FT.
Tencent is a big name in the global music streaming world. Tencent Music, a popular service in China, will go public this year as a standalone company. Further, the Chinese company also swapped shares with Spotify last year. It also owns Joox in Southeast Asia, according to Bloomberg.
Tencent has also invested in several Indian start-ups, like the mobile messaging service Hike, medical technology business Practo, car-hailing app Ola, education startup BYJU’s, and e-commerce startup Flipkart. Tencent is Asia’s most valuable company, and was the first Asian company to cross the $500 billion mark in terms of market value.
On the other hand, Tencent’s Chinese rival Alibaba is also putting a lot of money into the Indian companies. Alibaba is an investor in BigBasket, an online grocery business; XpressBees, a tech-driven logistics business; and Paytm, a popular financial technology startup. Also, Alibaba’s financial arm – Ant Financial – invested $200 million into the online food service Zomato, notes FT.
The growing Indian market is turning into a battle ground for the Chinese and U.S. Internet companies, which are making massive investments in the country. For instance, Amazon is competing with the local e-commerce startup Flipkart, which is also backed by Tencent. Further, Amazon is also entering the Indian music-streaming segment.
Amazon quietly launched its Prime Music service in India on Wednesday. The U.S. firm debuted its Prime service in the country about 18 months back. At the time, the Prime service excluded free music and video streaming services. The video service was added months later, and now, Amazon is releasing its music service.