India finally has its answer to Spotify after Reliance Jio merged its music service with Saavn, the startup it acquired this year.
The deal itself isn’t new, it was announced in March, but came to its logical conclusion after two apps merged to create a single entity, JioSaavn, which is valued at $ 1 billion. For the first time, India has a credible rival to global names like Spotify and Apple Music through the combination of a venture capital-funded business (Saavn) and a good telecom company, JioMusic, from the disruptive operator brand Jio. by Reliance.
This merger deal comes days after reports suggested that Spotify It is preparing to (finally) enter the Indian market, a move that has been in the planning for over a year, as we have reported.
That would set up an interesting battle between global names Spotify and Apple and local players JioSaavn and Gaana, a project by media firm Times Internet. which is also backed by China’s Tencent.
It’s not uncommon to see international firms competing in Asia – Walmart and amazon They’re the top two players in e-commerce, while Chinese firms Alibaba and Tencent have been actively pursuing their promises at internet companies for the past two years, but that competition has finally made its way into the streaming space.
There have certainly been glitches in recent years.
India-based pioneer Dhingana was picked up by Rdio in 2014, after initially shutting down its service due to financial problems. Ultimately, however, Rdio himself went bankrupt and sold to Pandora, leaving both Rdio and Dhingana in the starting graveyard.
Saavn, the first competitor also Dhingana, It seemed destined for a similar fate, at least from the outside. But he hit the big time in 2015 when he raised $ 100 million from Tiger Global, the New York hedge fund that made ambitious bets on several of India’s most promising internet companies. That gave him the fuel to reach this merger agreement with JioMusic.
Unlike the Dhingana fire sale, Saavn’s executive team continues under the JioSaavn banner.
The meeting is certainly a much stronger outcome than the Rdio agreement. JioSaavn has about 45 million songs, including a list of originals started by Saav, and access to the Jio network, which has more than 250 million subscribers.
The JioMusic service will be free, but Jio subscribers will get a 90-day trial of the “Pro” service without advertising. The company maintains five offices, including outposts in Mountain View and New York, with more than 200 employees, while Reliance has committed to injecting $ 100 million into the business for “platform growth and expansion.”
While linked to Reliance and Jio, JioMusic is a private company with Reliance as a stakeholder. You’d imagine staying private is an important carrot that has kept Saavn founders, Rishi Malhotra, Paramdeep Singh, and Vinodh Bhat part of the post-merger company.
The window appears open for the IPO broadcast. Spotify went public last April through an unconventional list that valued its business at around $ 30 billion, while China’s Tencent Music is in the process of a list that could raise $ 1.2 billion and value about $ 30 billion. , too. JioSaavn could be the next streamer to test public markets.