Tencent backs US music app Smule in Asia push
Chinese internet giant Tencent Holdings has led a $54 million funding round for Smule, a US-based social media music company, to support its expansion in Asia.
Existing investors including Adams Street Partners, Bessemer Ventures and Granite Ventures also participated in the funding round, according to a statement. Reuters reported that the investment values Smule at $604 million. The company will use the capital for marketing in China and Southeast Asia and to improve its international physical infrastructure.
Smule was founded in 2008 and provides platforms for users to share music with others, discover new music and interact with it. It claims to have 52 million monthly active users that create 20 million songs a day through its flagship app Sing! Karaoke. The company reported $101 million in revenue in 2016, 54% higher than the prior year.
Around 40% of Smule’s users live in Asia, but the region is also home to some of its major competitors, including Tencent’s own WeSing and Changba, whose developer Zuitao is backed by Sequoia Capital and BlueRun Ventures. Both apps offer similar social media functionality and have large communities that have created several celebrities.
Tencent’s investment comes as it builds its own online music platform, Tencent Music Entertainment Group, which includes Tencent’s QQ Music app along with Kugou and Kuwo, developed by China Music Corp. The internet giant bought a majority stake in China Music last year at a valuation of $2.7 billion.
Tencent and other Chinese internet players, including Alibaba Group, are aiming to drive consolidation in the country’s music streaming industry amid the authorities’ ongoing crackdown on online piracy.
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