Chinese internet giant Tencent holdings is is pushing deeper into the Indian technology market, with a sizable investment in New Delhi-based music streaming service Gaana, a person familiar with the matter said.
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 percent of the way towards building a business useful for 500 million Indians.”
The investment in Gamma Gaana Ltd. totals $115 million, and Times Internet Ltd., the Indian media and technology company that started the business, will also participate, said the person, who wasn’t authorized to discuss the information publicly and asked not to be identified. Tencent and Gaana confirmed the deal was taking place in an emailed statement Wednesday.
Tencent has established a grip on the global music streaming business. It owns Tencent Music, a popular service in China that’s expected to go public as a standalone company as soon as this year. Tencent swapped shares with Spotify last year, giving it a stake in one of the most popular music streaming services in Europe and the U.S. Tencent also owns Joox in Southeast Asia.
Music streaming services, Gaana included, are generally money-losing business. One promising, venture-backed streaming company in India called Dhingana struggled to secure licenses from record labels and create a sustainable business. Dhingana was snapped up in a fire sale in 2014 by Rdio, which filed for bankruptcy the next year and was sold to Pandora Media Inc.
Tencent’s investment is a bet on the growing Indian market. The company has committed to make substantial investments in the country, which is becoming a battleground between Chinese and U.S. internet companies. Amazon.com Inc. is competing fiercely with local e-commerce startup Flipkart Online Services Pvt, which is backed by Tencent. Amazon has also said it plans to enter the music-streaming business in India.
Times Internet Vice Chairman Satyan Gajwani, who oversees the company’s digital strategy, helped shepherd the Tencent deal, the person familiar with the matter said. Times Internet may take outside investments for other technology properties this year, the person said.