Tencent Holdings already owned more than a third of its India-based Spotify rival Gaana and now looks set to increase that stake by a significant amount.
That’s because Gaana – majority owned by Times Internet – just raised an additional $ 40 million in debt financing from Tencent’s China-based European entity, Tencent Cloud Europe B V.
According to Coach, Gaana revealed in a new regulatory filing that he raised INR 2.94 billion (approximately $ 40 million) from Tencent by issuing 47,050 Series C convertible debentures (OCDs) at an issue price of 62,397.53 INR ($ 850) per share.
In addition, reports Coach, Gaana also “passed a special resolution to increase the limit on external commercial borrowing to INR 6.7 billion or $ 90 million to facilitate obtaining funds from Tencent Cloud Europe.”
Gaana’s latest round of debt financing follows the music platform’s September increase in debt by INR 3.75 billion (roughly $ 51 million) to help fund its growth.
That $ 51 million came from two existing Gaana investors – Tencent and Times Internet – in the form of OCDs priced at INR 63,761.93 (about $ 870) per share.
At the time, according to financial documents in India, the move saw Tencent’s stake in Gaana grow to over a third (34.44%), while diluting Times Internet’s stake to 60.18%.
Coach estimates Gaana’s value after the last debt increase is between $ 570 million and $ 580 million. This is an increase from the $ 530 million estimated in September as a result of Gaana previous increase in debt by Tencent.
Tencent initially acquired a stake in Gaana through a $ 115 million investment in the company in February 2018.
Gaana announced in August 2020 that it had surpassed 185 million monthly active users.
MBW reported in March that Gaana CEO Prashan Agarwal was leaving the company after an internal memo confirming he would step down was sent to staff.
Gaana CEO is now reported as Gautam Sinha, who is also CEO of Times Internet – Gaana’s biggest shareholder.Music trade around the world