Here at Digital Music News, we’ve reported on troubled music streaming start-up closing down shop in Australia after failing to open their IPO to better focus on emerging markets like India, Indonesia, Saudi Arabia, and the United Arab Emirates. We then reported on the actual debts owed by two of Guver’a subsidiaries and the option by creditors to keep them trading in an effort to get some of the money back. Now, like a train wreck that occurs during the middle of a car crash, Guvera’s woes seem to be getting from bad to worse to downright apocalyptic.Australian tabloid The Courier Mail and ad news site Mumbrella are now reporting that Guvera’s planned success in India may not be as rosy as CEO Claes Loberg has tried to paint it. Despite seeking about $20 million of revenue in India, a month before telling investors about supposed “big opportunities in the developing nation,” Guvera was struggling to pay off debts, just like in Australia. An internal memo obtained by Mumbrella says, “Recent slow/no payments to labels, suppliers and partners is beginning to affect opportunities.” Current CEO Claes Loberg has denied any knowledge about the memo, and refuted that Indian revenues were only at barely over the staggeringly low amount of 573,000 rupees in April, or $8,581, labeling this as simply “incorrect.” He also denied that Guvera India had put on hold a deal with Indian entertainment company Hungama Music due to non-payment of 2015 fees, estimated to be around $3 million, labeling this report as “incorrect” once again.
To what Loberg couldn’t refute, he said he couldn’t “comment on specific partners,” including the company’s planned involvement in iMedia Summit being shut down after it couldn’t pay ad:tech New Delhi after being named as a Gold Sponsor in late February.
The Hindu BusinessLine reported in May that Guvera had raised ₹100 crore, or about $14,970,000 to compete in the Indian market, and would increase its user base from 7 million to 21 million by the end of the business year.
Guvera has yet to comment on this news.
Thanks once again to Digital Music News user The Hollywood Non Reporter for the heads-up on this story.
“Australian tabloid The Courier Mail and ad news site Mumbrella are now reporting”
This sums up all that’s gone wrong with DMN.
The company had many issues and if you decide to make the effort and research what was being said to potential investors, existing investors and consumers prior the current situation then you’ll be glad things are now out in the open..
The Australian Stock Exchange and leading Investor and share market commentators put out public media announcements as to why people should be very cautious about this entity.
However, after looking further into things.. I think Guvera may still climb it’s way out of this financial black hole and remain a popular alternative to Apple and Spotify in places like India and possibly some other non-western markets.
The idea seems sound to me.. offer a free tier streaming service, reward artists/labels and be advertiser/brand funded.
It is without doubt that most people in the world want access to listening to music for free… just like listening to music on the radio .. but with the benefits of the digital and Internet age of personalization and choice of content.
The challenge is obtaining the capital required to build the infrastructure and sales/promotion machine in order to gain consumer and brand traction.
I was impressed with Guvera’s Indian operations manager Ananya Amin – seems very switched on and the operations in India seems to be well constructed and with good technologists and staff.
So although the reports of the collapse and the situation within the Aussie market is very unfortunate for the company and it’s shareholders and has put a downer on things.. India may well turn out to be the golden light for Guvera.
Maybe it’s a very smart move to bypass USA, CA, UK, AUS, NZ and instead go for the markets that most people forget about..
Let’s face it, India is a huge market and we all know from seeing those Bollywood type films that they’re absolutely crazy about music..