Reliance Buys Stake In Saavn, Merges Music Apps

India’s richest man Mukesh Ambani is now looking to tap into the country’s nascent digital music streaming market.

Ambani’s flagship company Reliance Industries will acquire stakes from Tiger Global Management, Liberty Media and Bertelsmann in New York-based streaming services provider Saavn for Rs 676 crore ($104 million), according to a statement. It will also invest another Rs 130 crore ($20 million) in the company to make it into one of the largest streaming services in the world.

The parent of Reliance Jio said it will merge its JioMusic with Saavn, which owns rights to over 30 million songs in English, Hindi and other Indian languages, creating an entity valued at Rs 6,500 crore ($1 billion). The company expects to complete the deal before June 30.

Reliance Industries will own 81.7 percent stake in Saavn India post the transaction. The company said it will invest another Rs 520 crore in the merged entity, which will be used for growing and expanding the platform.

The deal comes at a time when music listeners in India are warming up to a palette of streaming services available in the country, including include Gaana.com, Wynk, Saavn, Apple Music, Google Play and now even Amazon Prime Music. The number of music streaming users in India has more than tripled since 2015 to 87.6 million, according to an EY India report. That online audience is only expected to grow further with increasing data speeds, triggered by Jio itself, and higher smartphone penetration.

Also Read: Reliance Jio’s New Users = 2 x (Bharti Airtel + Vodafone + Idea)

The three co-founders of Saavn—Singh, Rishi Malhotra, and Vinodh Bhat—will continue to lead Saavn.

By combining the entities, Reliance aims to develop a media platform with a global reach, original content from across borders, and an independent artist marketplace, according to its release. That will also become one of its largest mobile advertising mediums, it said.

The investment in Saavn marks RIL’s fourth biggest effort to create a footprint in the entertainment and news content industry after the acquisition of Network 18 Media & Investment Ltd. in 2014, last year’s purchase of a 24.9 percent stake in movie and television show producer Balaji Telefilms Ltd. and last month’s investment with Eros International Plc.