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Exclusive: Gaana acquired by Radio Mirchi’s parent for Rs 25 lakh

Entrackr · 1y ago

Medial

After a potential merger and acquisition talks with Airtel Wynk fell through, Times Internet and Tencent-backed Gaana consolidated with Times Group’s listed subsidiary Entertainment Network India Limited (ENIL) in December 2023. However, the deal somehow managed to bypass major media attention as of now. Significantly, Gaana was acquired for Rs 25 lakh, as per ENIL’s filings with the National Stock Exchange (NSE). ENIL is promoted by Bennett Coleman, and operates popular FM radio brand ‘Radio Mirchi’. For context, Gaana raised over $200 million in its lifetime, and was last valued at around $580 million, according to Entrackr’s data. Gaana’s consolidation with ENIL indicates that it’s a distress sale and the firm has given up on hopes of a third-party acquisition. The details of the acquisition are limited at the moment, and there is no clarity about Tencent’s holding in the 14-year-old platform. Entrackr’s queries sent to Times Internet and ENIL on Friday didn’t elicit any response. We will update the story in case they do. According to Entrackr’s data, Times Internet used to own a majority in Gaana whereas Tencent had around 35% stake until September 2020. To keep the platform up and running, Times Internet has also been injecting debt in Gaana at regular intervals. In July 2023, the music and podcast streaming platform received Rs 100 crore debt from Times Internet that eventually got converted into equity shares. Now, Times Internet has committed to inject up to Rs 10 crore debt in Gaana, as per its regulatory filings with the RoC this week. As per ENIL’s chief executive officer Yatish Mehrishi, the firm also invested Rs 15 crore in the first quarter of FY25. As the equity investments in India from its bordering companies aren’t allowed, Ganna received back-to-back debt rounds worth $90 million led by WeChat-owner Tencent in September 2020 and June 2021. The downfall of Gaana could also be ascertained from erosion of its scale which nosedived by over 80% to Rs 12.5 crore of revenue during the previous fiscal year (FY24), Mehrishi disclosed Gaana’s FY24 revenue numbers during investors’ call in May. After the acquisition, ENIL put Gana completely behind a paywall, and also doubled the subscription fee to Rs 599. These changes were reflected in its collection in the last quarter of FY24, which stood at Rs 9.5 crore. On the other hand, ENIL’s consolidated operating revenue shrank 25.79% Q-o-Q to Rs 113.46 crore but the Mumbai-based company slipped into red with Rs 5.45 crore losses in Q1 FY25. Gaana also went through a management rejig as it replaced its long time chief executive officer (CEO) Prashan Agarwal with Sandeep Lodha in mid-2021. Lodha also quit the firm in July 2023. At present, Gaana is being run by ENIL’s chief executive officer Mehrishi. Amidst the split of Times Group assets between Samir and Vineet Jain, Times Internet has been selling out its portfolio and incubated companies for the past three years. It recently sold its subsidiary ETMoney to 360 One (formerly IIFL Wealth) for about $44 million. This was the seventh subsidiary from which Times Internet took exit since 2021. In June, Amazon acquired the assets of MX Players from Times Internet. In February 2022, The Gurugram-based company sold MX TakaTak to ShareChat while DineOut was acquired by Swiggy in May 2022. In the same year, Times Internet sold its three companies MensXP, iDiva, and Hypp to e-commerce roll-up unicorn Mensa.