Hungama Digital Media Entertainment, India’s top music and video streamer, has raised $25 million (Rs 166 crore) in a fresh round of funding led by Chinese smartphone maker Xiaomi Corp. Existing investors Intel Capital, Bessemer Venture Partners and Indian billionaire Rakesh Jhunjhunwala, who is also Hungama’s chairman, took part as well, the company said in a press release on Monday.
Hungama, which is betting on video in particular, and digital content in general, will be the next catalyst for smartphone-led internet penetration in India, where more than 100 million such handsets were sold in 2015. For Xiaomi, which garnered a strong following for its Mi series of smartphones in India since its entry in July 2014, the investment opens up a world of high-quality local content that immediately make its smartphones that much more attractive.
India is adding 80 lakh new consumers to the internet each month with 90 percent of digital content consumption being driven by mobile devices, Neeraj Roy, Hungama’s co-founder and CEO, said in the press release. “Young Indians love their music and movies and the mobile will be the most used screen for this generation. Content will drive the next phase of Digital India,” he said. This year, Hungama expects to raise its active user base from 6.5 crore to 10 crore, Roy said in the release.
“We think of smartphones as a platform for us to deliver internet services, and this includes content,” Hugo Barra, Xiaomi’s vice president for international operations, said in the release. “We are investing in Hungama not only to start integrating content into our smartphones, but also to grow together with them and deepen our understanding of the content sector in India.”
Last month, Xiaomi launched its Mi 5 flagship smartphone in India.
With this round of funding, Hungama will expand the content library and invest further in technology on its mobile apps Hungama Music for music and Hungama Play for premium video, including movies, television and original series. Hungama will soon add about 1,500 hours of television content along with original programming on Hungama Play, which currently has about 8,000 movies in English and 12 Indian languages, according to the press release.
The current round of funding follows the $40 million Hungama had raised from Bessemer, Intel Capital and others in mid-2014.