Indian music streaming service Gaana has raised $115 million in a funding round led by Chinese tech giant Tencent.
Gaana, a Spotify-like platform, said Wednesday it would look to use the raised capital to invest in artificial intelligence to personalize its music platform and develop its paid-user subscription product.
The firm was established in 2010 by Indian tech incubator Time Internet, which has also backed the funding. Gaana did not specify how much money was invested by Tencent and Time Internet.
“Going forward, I think as we build the base, we believe that the market — with low data prices, low smartphone prices — we are seeing a huge traction and we believe that the market is going to continue to grow at full speed,” Gaana Chief Executive Prashan Agarwal told CNBC in an interview.
“We believe that over the next few years there will be at least 300 million smartphone users who jump onto the bandwagon of live-streaming music services given the convenience and the quality and the catalog size.”
Agarwal said Gaana is investing heavily in machine learning and original content. He added that the firm’s main target audience is the international Indian diaspora community.
He said: “Almost 10 percent of monthly active users comes from outside of India. These are Indians that want to connect back to the roots and listen to the regional music that India has to offer.”
Tencent is Asia’s most valuable company, with a market value of almost $525 billion. It was the first Asian firm to pass the $500 billion mark, an achievement it shares with Silicon Valley titans Apple and Facebook.
Gaana said it passed 60 million monthly active users in December. Spotify’s last figure for monthly active users, released in June, was 140 million.
Tencent already has a stake in the Swedish start-up, which plans to go public via a direct listing on the New York Stock Exchange.
Tencent, a rival to Chinese e-commerce corporation Alibaba, has invested in a number of other Indian companies including messaging service Hike, e-commerce firm Flipkart and ride-hailing company Ola.
Explaining Tencent’s decision to invest in Gaana, Martin Lau, the Chinese conglomerate’s president, said in a statement: “As more affordable mobile data plans are driving smartphone penetration in India, we believe growth in the music streaming market will accelerate.”