Indian streaming service Gaana has raised a $115m funding round led by Chinese tech firm Tencent, as it sets its sights on growing to 200 million active users in the next three years.
That would be a sharp rise from the 60 million monthly active users that Gaana has now, with parent company Times Internet publicly mulling plans for an IPO for its music-streaming service.
“Tencent is a strategic partner for us, with deep expertise in digital music that will benefit Gaana. We will be very happy to see Gaana continue to grow and potentially IPO in a few years,” Times Internet vice chairman Satyan Gajwani told the Economic Times.
Gaana CEO Prashan Agarwal added (per the Times of India) that the funding will be used to beef up Gaana’s personalisation features, as well as to boost its subscription tier. “We have penetrated only 5-6% of India. Over the next few years, we want to take this to 20-30%,” he said.
The round – which Times Internet also contributed to – is part of Tencent’s wider investment in India, which has seen it back e-commerce firm Flipkart, taxi-booking service Ola and messaging app Hike in recent times. “As more affordable mobile data plans are driving smartphone penetration in India, we believe growth in the music streaming market will accelerate,” said Tencent president Martin Lau in a statement.
It’s the second nine-digit funding round for an Indian streaming service in recent years, following Saavn’s $100m round in July 2015. These services and their investors are banking on strong growth ahead, driven by those data plans and smartphone sales. IFPI figures show that in 2016, India was the world’s 19th biggest recorded-music market, with $111.6m of revenues – $72.1m of which was digital, including $53m from streaming.
In 2015, KPMG predicted that the Indian recorded-music business would be worth $300m by 2019, while a bullish report from Deloitte the same year predicted $476.3m of Indian digital-music revenues in 2020, at which point it expected there to be 273 million online-music listeners in the country.