MUMBAI: Recently, music streaming service Spotify announced plans to take the video route alongside its music streaming service. Following that path is yet another streaming service-Saavn. The US-based Indian music streaming firm has managed to raise around $100 million to expand its service to video delivery for subscribers. However, this is a not a new phenomenon in the Indian market considering Indian digital entertainment company- Hungama, also raised $100 million recently to further expansion plans, and is already providing music and video content as part of its subscription model.
Saavn confirmed that it had managed to raise $100 million in a Series C round led by Tiger Global. Investors who also took part in the round include existing investors Bertelsmann India Investments, Steadview Capital, Liberty Media, and Mousse Partners, and new ones such as Qulvest, hedge funds from Hong Kong and a number of strategic individuals. Avendus Capital in Mumbai and LionTree Advisors were the advisors for the deal. The $100 million fund will raise the value of Saavn, which started in 2007 at $300-400 million.
Saavn CEO Rishi Malhotra revealed that the service is adding a million monthly average users (MAU), with a total of around 14 million MAU currently and hopes to cross 20 million MAUs by the end of this year.
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The company is banking on mobile users to take up its music and video streaming service in a bigger way. Malhotra told techcrunch.com that almost 90 per cent of its subscribers are on mobile and have been averse to paying and hence, Saavn has been focusing on an ad-supported model for its music streaming service so far.
A part of the $100-million raised will be used to scale up its music streaming service which has a catalogue of two million plus songs, mostly Bollywood. The company is also working on expanding its sales force.
“The real purpose of this raise is to continue developing our product, acquiring a larger user base, and investing in the right components that make a healthy media company,” Malhotra added.
“We want to become an entertainment ecosystem for mobile,” he continued. “That means new audio products and also video, absolutely. The exciting thing about the [Indian] market that we can be part Spotify, part Pandora, and part Netflix.”
The company has signed on Bollywood heartthrob Ranbir Kapoor to promote Saavn in prime time commercials on mainline Hindi general entertainment channels in India.
