Music Giant Saregama Acquires Pocket Aces To Tap Young Audience

Music Giant Saregama Acquires 52% Stake In Pocket Aces At $40 Mn Valuation

SUMMARY

Saregama to acquire 92.61% stake in the Mumbai-based digital entertainment platform Pocket Aces

It will be investing INR 174 Cr to acquire 51.82% stake in Pocket Aces as a part of the first tranche

Saregama will also be investing an additional of INR 15 Cr by way of primary subscriptions of 25,974 shares of Pocket Aces

Indian music giant Saregama is acquiring a 51.82% stake in the new-age digital entertainment startup Pocket Aces at a valuation of $40 Mn. Besides acquiring the stake for INR 174 Cr ($21 Mn), Saregama will also invest an additional INR 15 Cr ($1.8 Mn) in the company.

Over the next 18 months, the music giant plans to acquire 92.61% stake in Pocket Aces. The remaining 40.79% of the acquisition would be based on the adjusted equity value of Saregama’s holdings or the enterprise value of Pocket Aces, whichever is higher.

Founded in 2013 by Aditi Shrivastava, Ashwin Suresh and Anirudh Pandita, Pocket Aces is a digital content creator and publisher behind the popular channels FilterCopy, Nutshell, and Gobble. The company focuses on youth, and features an IP catalog of over 3,000 content pieces across formats such as — web series, sketches, music videos, and reels.

Its talent management division — Clout oversees more than 100 digital influencers, while its long-form studio, Dice Media, produces youth-centric web series available on OTT platforms like Netflix, Hotstar, and Amazon.

The company also owned a gaming and esports app Loco, which was spun off in 2021.

The startup’s website claims to have 8.9 Mn YouTube subscribers, and the Loco app is said to have 8.5 Mn users.

To date, the startup has raised close to $20 Mn across funding rounds. Its last funding came in 2021, when it secured INR 17 Cr in debt from Stride.

According to a stock exchange filing by Saregama, Pocket Aces’ reported a 34% jump in revenue in FY23 to INR 104 Cr.

Earlier this year, the startup laid off around 50 out of its 200 employees across content, production and post-production teams.

The exchange filings revealed that acquiring Pocket Aces will enable Saregama to add a “whole new dimension IP (intellectual property) and a distribution network of over 95 Mn followers, which Saregama will leverage to further popularise its music library.

Saregama, which is listed on the BSE and the NSE, further noted that the acquisition will create synergies across verticals such as artist and influencer management, and long-format video.