Foreign investment firms continue to feel upbeat about Indian businesses and startups and the latest company to receive funding is the music streaming app Gaana, a Times Group venture. So far, Gamma Gaana was funded internally by Times Internet; however, now, Tencent Holdings has picked up a minority stake in the venture through an investment in the venture.
A total funding of $115 million (Rs 736 crore) has been jointly made by Times Internet and Tencent Holdings, but the breakup has not been revealed. There are no other investors in this venture.
Tencent Holdings, incidentally, holds a majority stake in Tencent Music Entertainment, considered the largest entity in the music entertainment business in China. Joox, a music streaming platform, with footprints across South East Asia is operated by this company.
Times Internet sees the coming on board of Tencent, a welcome move and one that will strengthen Gaana’s presence in the music streaming industry. It could help bringing in innovative offerings to its customers in the digital music space, Times Internet feels.
Times Group had ventured into digital music streaming through the Gaana app and it is reported that the company witnessed a 700% increase in its internet services being accessed by customers overall. Gaana’s CEO Prashan Agarwal also feels that the industry has hardly tapped 10% of the potential in India for music streaming and with 500 million Indians the target customers for the products and services.
Already, there has been a meteoric rise in the number of internet-enabled devices and the last figure quoted is around 300 million. With music streaming companies like Gaana reporting around 50-60 million subscribers, the road ahead is undoubtedly very rosy and bright for the business.
As the tariffs drop through disruptive practices by the carriers, the consumption of music streaming through mobile phones will show consistent growth in the coming years, experts predict.
The only area the leading players like Gaana have to sort out is to put in place a revenue model that can make the business profitable, but remain affordable to the consumers of the service.