Radio Mirchi's parent company acquired Gaana for just ₹25 lakh
Entertainment Network India Limited (ENIL), the parent company of FM radio brand 'Radio Mirchi,' acquired music streaming platform Gaana for just ₹25 lakh last year. The acquisition was disclosed in ENIL's filings with the National Stock Exchange (NSE). This development followed unsuccessful merger discussions with Airtel Wynk, leading to Gaana's integration into Times Group's listed subsidiary ENIL in December 2023.
Gaana's valuation and financial backing
Gaana, supported by Times Internet and Tencent, was previously valued at approximately $580 million. The platform had raised over $200 million during its existence. However, the specifics of the acquisition are currently unclear, including information about Tencent's stake in the 14-year-old platform. Times Internet held a majority stake in Gaana while Tencent owned around a 35% share until September 2020.
Times Internet's financial support
To keep Gaana running, Times Internet has been consistently infusing debt into the platform. In July 2023, Gaana received ₹100 crore debt from Times Internet that was later converted into equity shares. Now, Times Internet has pledged to inject up to ₹10 crore debt in Gaana, as per its regulatory filings with the RoC this week.
ENIL's investment and Gaana's revenue decline
ENIL's Chief Executive Officer Yatish Mehrishi revealed that ENIL also invested ₹15 crore in the first quarter of FY25. Despite bagging consecutive debt rounds worth $90 million led by WeChat-owner Tencent in September 2020 and June 2021, Gaana's revenue fell by over 80% to ₹12.5 crore during FY24.
Post-acquisition changes and financial impact on ENIL
Following the acquisition, ENIL made Gaana entirely subscription-based and doubled its subscription fee to ₹599. These changes were reflected in its collection in the last quarter of FY24, which stood at ₹9.5 crore. However, ENIL's consolidated operating revenue shrank 25.79% QoQ to ₹113.46 crore, and the company reported losses of ₹5.45 crore in Q1 FY25.
Management changes at Gaana
Gaana experienced a management overhaul, with its long-serving CEO Prashan Agarwal being replaced by Sandeep Lodha in mid-2021. Lodha left the company in July 2023, and currently, Gaana is being managed by ENIL's CEO Mehrishi. This acquisition is part of Times Internet's ongoing asset sell-off, amid the split of Times Group assets between Samir and Vineet Jain.
