Reliance Industries Limited (RIL) has announced that it has signed a deal with online music streaming service Saavn for the merger of JioMusic with Saavn. After the agreement, the combined entity will be valued at over US $1 billion, with JioMusic’s valuation at $670 million.
Reliance Jio will invest $100 million out of which $20 million will be invested upfront for expansion of the digital music platform making it one of the largest streaming services in the world. “The integrated business will be developed into a media platform of the future with global reach, cross-border original content, an independent artist marketplace, consolidated data and one of the largest mobile advertising mediums,” said RIL.
Additionally, Reliance is also acquiring partial stakes from the existing shareholders of Saavn for US $104 million while the balance stake will be retained by other shareholders. Some of the shareholders of Saavn include Tiger Global Management, Liberty Media, and Bertelsmann among others.
On the other hand, Saavn will continue to operate the over-the-top media platform available on all app stores. The founders of Saavn, Rishi Malhotra, Paramdeep Singh and Vinodh Bhat will continue their leadership roles in the combined entity.
Further, the combined music platform plans to invest aggressively to accelerate the streaming service’s growth to benefit all aspects of the ecosystem, including users, music labels, artists, and advertisers. Also, the combined entity will be built on Saavn’s Original Programming, Artist Originals (AO). The agreement is under customary closing conditions and might be completed soon.
Commenting on the strategic partnership, Akash Ambani, Director, Reliance Jio, said,
“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.”
Rishi Malhotra, Co-Founder, and CEO at Saavn said,
“Nearly 10 years ago, we had a vision to build a connected music platform, dedicated to South Asian culture across the globe. Vin, Param and I always envisioned the company for the long term with intense focus on products, data, and ground-breaking original content. Our alignment with Reliance enables us to create one of the largest, fastest-growing, and most capable media platforms in the world.”