Xiaomi leads $25-million investment in Hungama, bets big on digital content

Chinese smartphone maker Xiaomi has made its first investment in an Indian company, leading a $25-million investment into Hungama Digital Media Entertainment.

Hungama’s existing investors Intel Capital, Bessemer Venture Partners, and Indian billionaire Rakesh Jhunjhunwala, were also a part of the investment round. Hungama will use the money to add more content on its platform.

Xiaomi bullish Hugo Barra, Vice-President of Xiaomi, said, “Xiaomi has been an Internet company from the very start. We think of smartphones as a platform for us to deliver Internet services, and this includes content. As our user base in India grows and 4G penetration continues picking up, we will start to see more and more consumption of digital media through Xiaomi devices.” Xiaomi, valued at over $45 billion, has already invested in 55 start-ups globally, of which 20 are yet to launch a product.

In a recent interview with

BusinessLine , Barra had said the company is in talks for partnerships and even possible investments in Indian companies focused on news aggregation, online video content, and mobile gaming.

While most investments made by Xiaomi have been into hardware start-ups that make anything from mobile power banks to hover boards, the focus for investments in India will remain on Internet and software start-ups, Barra said.

“India is yet to have a big hardware start-up ecosystem,” Barra had earlier said.

He also acknowledged that it is difficult to make Indians pay for content, which in part has impacted the delay in launching its branded services so far. The partnership with Hungama could be Xiaomi’s first step towards changing that as it integrates Hungama’s content services into its platforms, which will also include themes and ringtones.

“While making users pay for content is generally a challenge in India, app owners can still make money through ads. Moreover, I believe there is room for premium paid content in India,” Barra said.

Hungama has built partnerships with over 700 content creators, and now has over 8,000 movies in Hindi, Tamil, Telugu, Malayalam, Bengali, Punjabi and six other Indian regional languages on its platform.

Content addition Over 65 million monthly active consumers access Hungama across platforms for its music, video and movie services.

“With this investment, we intend to further strengthen our movie and TV services, and in fact, Hungama Play will shortly add 1,500 hours of TV content in Indian languages as well as in English,” said Neeraj Roy, Founder and CEO of Hungama.