Co to get board seat in the startup backed by Jhunjhunwala post its 1st investment in India
New Delhi: Xiaomi has made its first investment in India, leading a $25-million (.`170 crore) funding round into Rakesh Jhunjhunwalabacked Hungama, with the aim to ramp up entertainment content on its devices which could be a big differentiator in the crowded Indian smartphone space.
China’s largest smartphone maker, which has invested along with Hungama Digital Media Entertainment’s existing investors Jhunjhunwala, Intel Capital, and Bessemer Venture Partners, will pick up a minority but undisclosed stake in the Mumbai-based aggregator and publisher of entertainment content. “We’re partnering for video on demand service in India and integrating it into our platform,” said Xiaomi’s head of international operations Hugo Barra.
“With 4G taking off, starting this year, video on demand is unlocked because the experience gets a huge upgrade when you switch from 3G to 4G,” Barra said, referring to the high-speed broadband services of telcos such as Bharti Airtel, Vodafone, Idea Cellular and similar upcoming services of Reliance Jio Infocomm.
The two companies didn’t divulge Xiaomi’s quantum of investment, but the smartphone maker has previously said that its investments could start from $100,000 and go higher, with mainly seed and A level funding in India. Neeraj Roy, CEO of Hungama, indicated that Xiaomi will get a bo- ard seat in the company. “We’d like it…there’s going to be a strong synergistic partnership between product team, learnings, in terms of how we take this forward.” Hungama has partnerships with over 700 content creators, and has over 8,000 movies in Hindi, Tamil, Telugu, Malayalam, Bengali, Punjabi and six other Indian regional languages on its platform.
The investment marks Xiaomi's first investment into a start-up outside its home market of China, and underlines the importance of the fast growing Indian smartphone market, which is well on its way to become a leading base of internet consumers, with a present base of around 400 million users. It also comes within a few days of rival Chinese technology company LeEco, a new entrant into India’s smartphone market, announcing plans to invest over $10 million to set up in-house Content Delivery Networks (CDNs) in 10 cities across the country by the end of the year. LeEco has already announced partnerships with Eros and Yupp TV for content on mobile phones.
Xiaomi will integrate Hungama’s video-on-demand service with the Mi platform available on smartphones and televisions, the latter not yet available in India. The companies did not divulge the timeline of integration, but said that post that, the platform will have some free and some paid content that will be part of the monetisation strategy. China's largest smartphone maker is replicating its home model in India, where it has launched two of its leading smartphones in 2016, including the latest flagship Mi 5 last week.
While the quantum of investment was not made public, Xiaomi had said its investments could start at $100,000 or higher