The promise of mobile in India is attracting venture capital at a rate never seen before. The latest deal of note involves Hungama, a media company that provides music, videos and movies on mobile, desktop and beyond, which is on the cusp of raising more than $100 million.
Sources close to the media company told TechCrunch that it is in “advanced” talks with existing investors Intel Capital and Bessemer Venture Partners, which fronted a $40 million raise last summer. Intel Capital invested an undisclosed sum in the business in 2012.
Hungama was founded in 2005 as a marketing and communications agency that offered services such as interactive gaming, lead promotion and community building for brands. Eying the growth of mobile, it branched out to entertainment in 2009, and today it is arguably India’s most prominent player in that space. (The original, marketing-focused side of the business was sold to WPP in 2012.)
The company is long profitable and the funding round closed last year was for growth. It’s the same story this time around, only with loftier targets. TechCrunch understands that this soon-to-be-completed round will be used to grow the company’s footprint on mobile, tapping into the vast growth in adoption of smartphones that is expected in India.
More specifically, we understand that Hungama will invest to develop its technology, platforms and increase its content libraries. Sources at the company also revealed that the money could be used to acquire other market players.
The total audience for Hungama’s services hit 48 million users in February. Of that figure, a whopping 43 million consumed content on a mobile device, with 13.8 million paying for some form of content across its platform. Hungama’s services were used by 227 million consumers during its last financial year, with around one-third spending money in some way.
Those numbers are impressive, and Hungama relationship with India’s telecom operators is a key part of its mainstream reach. Not only do those alliances provide a platform to distribute services across the country, but they allow Hungama to offer song downloads unlike other rivals. In a country where the speed of mobile data connections varies wildly and the overwhelming major of consumers are on pre-paid mobile tariffs, that’s a crucial feature. (The demand for off-network media is such that YouTube recently introduced offline playback in India and two other markets.)
The company’s main competitors in the music streaming space in India include Times India-owned Gaana, Saavn — which recently hit 11 million monthly users — and Rdio, which entered India in January having acquired Dhingana in 2014. There is also operator Airtel’s Wynk service.
Unlike these younger companies, Hungama goes beyond music to offer Netflix-like movies. With India’s music and film scene closely tied together, the company is betting that this synergy and its international catalog — which just added Disney and Marvel — will help it stand apart from the rest. Being included on Facebook’s free Internet.org portal, which just arrived in India, doesn’t hurt too.Featured Image: vitma/Shutterstock