Saregama will invest another Rs 15 crore for an issue of fresh shares, in addition to a secondary purchase of shares from some of the existing shareholders, taking its stake to 92.61%.
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Existing Pocket Aces investors include Peak XV Partners, formerly Sequoia Capital India, and 3one4 Capital.
“Acquiring Pocket Aces will add on a whole new dimension of IP (intellectual property) and a distribution network of over 95 million followers, which Saregama will leverage to further popularise its music library among the 18-35 audience segment. It will also create synergies across artist and influencer management and long-format video creation businesses of the two companies,” the company said in a stock exchange filing on Thursday.
Pocket Aces operates digital content channels like FilterCopy, Dice Media and Gobble as well as esports streaming platform Loco. In 2018, Pocket Aces became the first digital company to sign a multi-show deal with American digital streaming company Netflix in India.
Saregama said that the first tranche of the acquisition and primary subscription of additional shares is expected to be completed within two months of the date of execution, while the next tranche of secondary purchase of shares will come through within 18 months.
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“This acquisition signifies the confluence of tradition and innovation. While we have always been leaders in the realm of music and media, this partnership with Pocket Aces will add new dimensions to our business as we tap into the burgeoning young digital audiences,” said Avarna Jain, vice chairperson, Saregama.On February 6, ET reported that Pocket Aces had laid off a fourth of its workforce as it transitions to a lean operating model to save costs and become profitable in the coming financial year.
Founded by Ashwin Suresh, Anirudh Pandita and Aditi Shrivastava, Pocket Aces recorded operating revenue of Rs 104.39 crore in FY23 compared with Rs 97.34 crore in the previous fiscal.
According to Tracxn, Pocket Aces had so far raised $21.2 million, or around Rs 176 crore at the current exchange rate, from investors such as Peak XV, 3one4 Capital, Kris Gopalakrishnan’s Axilor Ventures, North Base Media and NuVentures. Prior to the Saregama acquisition, Suresh, Pandita and Shrivastava together owned around 31% stake in the company.
On Thursday, shares of Saregama, which is a RP-Sanjiv Goenka Group company, ended 4.6% higher on the BSE at Rs 369.10.