Jio on Friday announced a deal with Saavn for the integration of its Jio Music service with the popular music streaming platform. Reliance Industries, the parent company of Jio, in a statement said the combined entity would be worth $1 billion (roughly Rs. 6,500 crores), with the "implied valuation" of Jio Music standing at $670 million (approximately Rs. 4,300 crores). Jio also plans to invest $100 million (about Rs. 650 crores) in the joint entity, with 20 percent being pumped upfront with the aim of making the combined entity "one of the largest streaming services in the world."
Saavn, based in New York, has sought to tap into the appetite for music by tech-savvy Indians by offering a vast catalogue of songs across 15 languages. But like many streaming apps including global leader Spotify, Saavn has struggled to turn rapid growth into profit. It said last year that it had 22 million monthly users, a sliver of the potential in India.
A joint statement did not specify how the joint platform would be branded but said it would preserve one of the key attractions of Saavn -- original content by artists from the subcontinent.
"Nearly 10 years ago, we had a vision to build a connected music platform, dedicated to South Asian culture across the globe," Rishi Malhotra, the co-founder and CEO of Saavn, said in a statement.
"Our alignment with Reliance enables us to create one of the largest, fastest-growing and most capable media platforms in the world," he said.
As part of the deal, Reliance will take a stake in Saavn for $104 million while Malhotra and his two fellow co-founders will keep their leadership posts. Existing stakeholders in Saavn include the German media giant Bertelsmann and US investor Liberty Media.
Streaming has rapidly transformed the music industry around the world by providing unlimited, on-demand songs online. Reliance's deal with Saavn comes amid expectations that Spotify will soon launch in India, with reports that the Swedish company has located office space and hired key employees.