Tencent is catching up quickly in Indian market with investments, the Chinese social networking giant is reportedly grabbing a sizable stake in Gaana, a New Delhi, India-based music streaming service, says Bloomberg citing sources familiar with the matter.
Tencent and Gaana confirmed a deal is happening in an email statement to Bloomberg.
According to the source, Tencent, together with Indian media and technology company Times Internet Ltd. that founded the business, will invest a total of US$115m into the streaming service.
Gautam Sinha, CEO of Times Internet, said in a statement that “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.”
Founded in early 2011, Gaana is one the major players competing in the Indian music streaming ground, serving local users ad-based free online streaming in addition to a premium subscription model which allows offline storage of online contents. The service is offered in English alongside many local language options.
According to a 2015 Indian media and entertainment industry report by accountancy KMPG, streaming services like Saavn, Gaana, and Hungama were amongst the most popular ones.
Chinese smartphone maker Xiaomi led a US$25 million round in Hungama in what was by then the first investment Xiaomi made in India.
Both local, and Chinese players are looking to chase an increasingly hot Asia on-demand content market.
According to a report by McKinsey, a management consultancy, music streaming services users in Hongkong, Singapore, Malaysia, Thailand, Philippine as well as Indonesia will be growing to over 87 million by 2020.
Tencent test launched a streaming service Joox in Hongkong back in 2015.
The social and gaming giant has already consolidated its own music streaming services in the local market through a series of acquisitions, which gave life to the largest Chinese online music service Tencent Music Entertainment Group, controlled by Tencent.
Tencent, which already partnered with international record labels like Sony, Universal, and Warner, also reportedly invested into Swedish streaming service Spotify last year-end in a deal saw Tencent and Spotify swap shares.
Tencent Music Group currently owns three of the largest Chinese music apps by users: QQ Music, Kugou, and Kuwo, with an aggregated 700 million monthly active users. The group has been enthusiastically expected to go public this year at a valuation of at least US$10 billion.