BackTiger Global, others invest $100 million in Saavn
Fresh capital to be used to drive long-term product development and aggressive customer acquisition, says Saavn in a statement
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New Delhi: Saavn has raised $100 million in new funds from venture capital firm Tiger Global Management Llc and other investors, valuing India’s largest music streaming company at as much $400 million.
Tiger Global, which also backs India’s largest online companies including e-commerce marketplace Flipkart and taxi-hailing service Ola, led the funding round in which new investors such as private equity firm Quilvest, some Hong Kong-based hedge funds and strategic individual investors also took part.
Tiger Global, which announced the investment in a statement, did not disclose the names of the hedge funds and individuals.
The new investment values Saavn at $300-400 milllion, according to a Saavn spokesman. The company has raised close to $126 million, including the latest round.
“The team has built a leadership position in a unique marketplace while at the same time developing a world-class music service," Lee Fixel, a partner at Tiger Global, said in the statement. “We’re excited to support Saavn as it continues to define India’s mobile entertainment market."
Other existing investors in the company, including Bertelsmann India Investments, Steadview Capital, Liberty Media and Mousse Partners, participated in the funding round. Avendus Capital and New York-based LionTree Advisors acted as advisors on the deal.
Saavn will use the money to strengthen its product, invest in ad technology, expand the sales force and obtain new content, the company said in the statement. Some of the money will go towards customer acquisition.
As India’s mobile phone users rapidly adopt Android handsets, Saavn is seeing a boom in music app installs.
The company has about 14 million monthly active users, up from 11 million in the first quarter of 2015, and expects to cross 20 million users by the end of the year.
Saavn is currently available on the Android and iOS mobile phone operating systems. The company is working with teams at Microsoft to launch Saavn on Windows in August.
“Music streaming is at the centre of the music industry, and India is one of the most important music economies in the world. With two million Androids shipping each week, music is driving data consumption and redefining mobile advertising," said Rishi Malhotra, chief executive and co-founder of Saavn.
“We are building the best-in-class mobile entertainment ecosystem, with music as the foundation. Our investors continue to be the best partners in the world. We’re excited to add millions of users to the Saavn family and deliver our long-term product vision across multiple platforms. Music is only the beginning," Malhotra added.
Founded in 2007 by Malhotra, Vinodh Bhat and Paramdeep Singh, more than 90% of Saavn users consume music on their mobile phones.
The company is expected to announce a significant update to its mobile products that would include a personalized multi-language homescreen supporting 11 languages and “one click play" on the homescreen.
In January, Saavn hired Mahesh Narayanan from Sociomantic Labs GmbH, a German display advertising company, as its global chief operating officer.
Piracy is a major challenge to the Indian music industry because of lack of enough legal sources of digital content in the country. With the rapid increase in Internet penetration in India, the problem of piracy has only grown bigger. Still, investors believe that the launch of more legal music streaming entities will help counter the challenge.
“With the legit on-demand music being available easily the illegal downloads will help reduce. And as more and more people start using online music it will give the companies more opportunity to monetize," said Sandeep Ladda, partner and national leader, technology, at consulting firm PriceWaterhouseCoopers India.
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