New Delhi: In a surprising turn of events, Entertainment Network India Limited (ENIL), the operator of popular FM radio channel Radio Mirchi, has acquired music streaming platform Gaana for a mere Rs 25 lakh. The deal, which was finalized in December 2023, has sent shockwaves through the industry given Gaana’s previous valuation of around $580 million.
The acquisition comes after failed merger talks between Gaana and Airtel Wynk. Gaana, backed by Times Internet and Tencent, had previously raised over $200 million in funding. However, the platform has been facing financial challenges, with revenue plummeting by over 80% to Rs 12.5 crore in FY24.
To stem losses, Gaana has implemented a paywall, doubling its subscription fee to Rs 599. Despite these measures, ENIL itself reported a loss of Rs 5.45 crore in Q1 FY25, with consolidated revenue dropping by 25.79% quarter-on-quarter to Rs 113.46 crore.
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The acquisition marks a significant shift for Gaana, which has seen multiple leadership changes in recent years. Prashan Agarwal was replaced by Sandeep Lodha in mid-2021, followed by Lodha’s departure in July 2023. The platform is now under the management of ENIL CEO Yatish Mehrishi.
Times Internet, the previous majority shareholder of Gaana, has been actively divesting its portfolio. In addition to Gaana, the company has sold ETMoney, MX Player assets, MX TakaTak, DineOut, and other properties.
Industry experts are speculating that the acquisition of Gaana is a distress sale, given the significant disparity between the purchase price and the platform’s previous valuation. The future of Gaana under ENIL’s ownership remains uncertain, as the company navigates its own financial challenges.
