Reliance Jio on Friday signed an agreement for the combination of digital music service Saavn with JioMusic to create a digital music platform with global reach having a total value of over $1 billion.
The deal was led by Reliance Jio director Akash Ambani, who in a joint statement 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.”
Definitive agreements have been executed by the Reliance Industries for the combination of Saavan 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.
Up to $100 million will be invested by Reliance, out of which rupee equivalent of $20 million will be invested upfront. The investment is for the 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 obtaining a partial stake from the existing shareholders of Saavn worth $104 million. Saavn shareholders include Tiger Global Management, Liberty Media and Bertelsmann among others.
The leadership roles of the combined entity will be led by three co-founders of Saavn, Rishi Malhotra, Paramdeep Singh and Vinodh Bhat, who also drive the growth of it.
“Nearly 10 years ago, we had the 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.