NetEase Cloud Music, a leading online music platform in China, is rumored to be seeking its very first round of fundraising of RMB one billion (USD 150 million) that would give it a valuation of RMB eight billion.
NetEase Cloud Music, a subsidiary of Chinese leading portal and game maker NetEase, will sell off a 12%-15% stake in this round of financing.
New capital will be used to purchase more songs that can be played on its platform exclusively, to attract more music studios and singers, to advertise, to recruit more staff, and to enter the field of music playing hardware.
NetEase Cloud Music was launched in April 2013. By July 2015, it already had over 100 million registered users.
NetEase Cloud Music offers free online streaming and downloads through its platform, including an iOS app, an Android app, and its website.NetEase has usage rights to over five million copyrighted songs, and more than 1,200 musicians have registered accounts at NetEase Cloud Music.
This online music platform claimed that its profit in Q4 of 2015 reached RMB 16 million, but it also predicted that it would lose RMB 33 million in 2016 due to generous investment in copyright.
NetEase Cloud Music’s new move put itself in a competition with China’s largest online music business owner, Tencent. Last week, China Music Corporation (CMC) and Tencent Group announced the merger of their digital audio businesses, which is making Tencent dominate the industry.
After the merger, their ownership of music copyrights was further expanded: CMC and Tencent Group now has authorization rights to 42% of music copyrights in China.
(Top photo from pixabay.com)