Exclusive: Gaana raises $40 Mn debt from Tencent; likely to raise more

Music and podcast streaming app Gaana has raised $40 million from existing investor Tencent in what appears to be one of the largest debt rounds for a consumer internet company in India in 2021.

Gaana’s board has issued 47,050 Series C optionally convertible debentures at an issue price of Rs  62,397.53 each to raise Rs 293.6 crore or $40 million, regulatory filings show. It’s worth noting that each Series C OCDs shall carry interest at the rate of 0.01% of the face value of each Series C OCD per annum which is Rs 62,397.53.

The Times Internet-backed company has also passed a special resolution to increase the limit of external commercial borrowings to Rs 668.58 crore or $90 million to facilitate getting funds from Tencent Cloud Europe B V.

Since Gaana has increased the limit of borrowing, more money is likely to come in later tranches. 

The fresh round has come within a year for Gaana which raised a $50 million debt round from Tencent along with participation from Times Internet in September 2020.

According to Fintrackr’s estimates, Gaana has been valued at around $570-$580 million, post-money, in this round. In the previous financing, it was valued at $530 million.

Social media unicorn ShareChat, which raised a $502 million Series E round in April, is leading the chart in terms of raising convertible debt in 2021. The Tiger Global-backed company had picked up $225 million as convertible debt from Tencent and others in the same round.

Entrackr had exclusively reported the development on April 16.

Gaana claims to have a music library of 45 million songs along with 5,000 user-generated podcasts per month in multiple genres and languages. According to the company, it had 185 million monthly active users as of September 2020 and was targeting to reach 250 million MAU by March 2021. 

While the company’s current MAU couldn’t be ascertained, it has had close to 227 million downloads in India and overall 240 million downloads across the world on Android and iOS devices till date, as per Sensor Tower data.

Gaana’s arch-rival JioSaavn has 253 million downloads in India followed by Wynk’s 210 million downloads. Global music streaming players Spotify, YouTube Music, Amazon Music and Apple Music have 76 million, 49 million, 20 million and 3.8 million installs in India respectively. 

In March 2021, Prashan Agarwal, who was the CEO of Gaana for the past five years, had stepped down from his position.