MUMBAI: Move over hotstar.com. Competition is coming your way. Earlier, this year, the Neeraj Roy led music streamer Hungama.com raised around $100 million to expand its service into video delivery to its subscribers. Then Hooq.com announced its foray into the over the top (OTT) market. Now it’s the turn of New York headquartered Saavn to announce that it is going to move into delivering video content to its subscribers. The company late last night confirmed that it had managed to raise $100 million in a Series C round led by Tiger Global.
Among investors who also took part in the round figure: 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 advised on the deal. The $100 million fund raise values Saavn.com 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 end this year.
The company is banking on the 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 it raised will be used to scale up its music streaming service which has a catalogue of 2 million plus songs, mostly from Bollywood. It wants to expand 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 told techcrunch.
“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 heart throb Ranbir Kapoor to promote Saavn in prime time commercials on mainline Hindi general entertainment channels in India.
