In a surprising development, Gaana, once a dominant player in India’s music streaming industry, has been acquired by Entertainment Network India Limited (ENIL), the parent company of Radio Mirchi, for a mere Rs 25 lakh. This acquisition, completed in December 2023, followed the collapse of potential merger talks with Airtel’s Wynk, and has largely escaped the attention of the media.
Gaana, which had previously raised over $200 million and was valued at approximately $580 million, was absorbed into ENIL, a listed subsidiary of the Times Group, in what appears to be a distress sale. This deal signifies the end of Gaana’s attempts to secure a third-party acquisition, and the exact details, particularly concerning Tencent’s stake in the platform, remain unclear.
Times Internet, which owned a majority share in Gaana, has been supporting the platform through regular debt injections to keep it operational. In July 2023, it infused Rs 100 crore into Gaana, which was later converted into equity. Most recently, Times Internet committed an additional Rs 10 crore in debt, while ENIL itself invested Rs 15 crore in the first quarter of FY25.
The fall of Gaana is stark, as its revenue plummeted by over 80% to just Rs 12.5 crore in FY24. Following the acquisition, ENIL introduced a full paywall for Gaana’s services and doubled the subscription fee to Rs 599, which led to collections of Rs 9.5 crore in the last quarter of FY24. Despite this, ENIL’s overall financial health has suffered, with a 25.79% drop in consolidated operating revenue to Rs 113.46 crore and a Rs 5.45 crore loss in Q1 FY25.
Gaana also experienced a significant management shift with the departure of long-time CEO Prashan Agarwal, followed by his successor Sandeep Lodha, who resigned in July 2023. Currently, Gaana is managed by ENIL’s CEO, Yatish Mehrishi.
This acquisition is part of a broader pattern where Times Internet has been divesting its assets amidst an ongoing split of the Times Group’s holdings between Samir and Vineet Jain. Over the past three years, Times Internet has sold off several of its subsidiaries, including ETMoney, MX Player, MX TakaTak, and DineOut, among others.
Gaana’s fall from grace underscores the volatility in the streaming market and the challenges even well-established platforms face in maintaining their foothold amidst changing market dynamics.
