New Delhi: In an effort to reach out to more consumers, Reliance Industries Limited (RIL) on Friday signed an agreement to combine digital music service Saavn with its own JioMusic app to create a new entity valued at $1 billion.
RIL in a statement on Friday said JioMusic’s implied valuation for the transaction was $670 million.
The oil-to-telecom behemoth will invest an additional $100 million towards making the combined platform one of the largest music streaming services in the world.
Of the $100 million, $20 million will be invested upfront, the company said, adding that the three co-founders of Saavn — Rishi Malhotra, Paramdeep Singh, and Vinodh Bhat — will continue in their respective leadership roles at the combined entity.
The investments will be made in the form of rupee-equivalents of the amounts mentioned above.
In addition to this deal, Reliance Industries will also acquire a part of the stake held by Saavn’s existing shareholders for a sum of $104 million. Saavn’s shareholders, including Tiger Global Management, Liberty Media, and Bertelsmann, will continue holding the remainder of their stake.
“We are delighted to announce this partnership with Saavn, and believe that their highly experienced management team will be instrumental in expanding Jio-Saavn to an extensive user base, thereby strengthening our leadership position in the Indian streaming market,” said Akash Ambani, Director, Reliance Jio.
Currently, JioMusic has been India’s fastest growing music streaming application for over 60 consecutive weeks. It sources content from all major Indian and international labels and currently has over 16 million high definition songs across 20 languages.
Saavn has the unique distinction of being the only streaming service to feature on lists of top-grossing apps in numerous markets such as India, UK, Canada, United States, UAE, and Singapore, among others.
"The combined entity will have both Saavn’s streaming media expertise and Jio’s digital ecosystem to leverage. It will aim at benefitting all the stakeholders involved – users, music labels, artists, and advertisers," Reliance Industries said in the statement.
(Disclosure: News18.com is part of Network18 Media & Investment Limited which is owned by Reliance Industries Limited that also owns Reliance Jio)
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