New Delhi: In a deal led by Reliance Jio director Akash Ambani, Reliance Industries Ltd on Friday signed an agreement for combination of digital music service Saavn with JioMusic to create a digital music platform with global reach having total value of over $1 billion.
“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,” Ambani said in a joint statement.
Reliance Industries executed definitive agreements for the combination of Saavn with its digital music service, JioMusic. “The combined entity is valued at over $1 billion, with JioMusic’s implied valuation at $670 million,” the statement said.
Reliance will also invest up to $100 million, out of which rupee equivalent of $20 million will be invested upfront, for growth and expansion of the platform into one of the largest online 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,” the statement said.
As part of the Jio-Saavn deal, Reliance will be acquiring a partial stake from the existing shareholders of Saavn for $104 million. Saavn shareholders include Tiger Global Management, Liberty Media and Bertelsmann among others.
The three co-founders of Saavn, Rishi Malhotra, Paramdeep Singh and Vinodh Bhat, will continue in their leadership roles and will drive growth of the combined entity.
“Nearly 10 years ago, we had a vision to build a connected music platform, dedicated to South Asian culture across the globe. Our alignment with Reliance enables us to create one of the largest, fastest-growing, and most capable media platforms in the world,” Saavn co-founder and CEO Rishi Malhotra said.
With a massive addressable market opportunity of over 1 billion users in India and globally, the combined entity plans to invest aggressively to accelerate growth that would benefit all aspects of the ecosystem, including users, music labels, artists and advertisers, the statement said.
Jio-Saavn will also build on Saavn’s Artist Originals, which has delivered some of the top records in India and South Asia including Zack Knight and Jasmin Walia’s Bom Diggy.