Tencent Holdings has announced an USD 7.5 Mn investment over a 3 year period in MIH India Global Internet, promoter of Indian Social Networking site – ibibo.com, local search engine dwaar.com and a family tree portal onefamily.com.
Naspers Limited promoter of MIH India Global Internet holds substantial equity in Tencent Holdings and thus this indirect equity infusion with some technology transfer too.
Tencent has the right to subscribe for new shares up to the maximum amount resulting in its holding 50% shareholding of MIH India Global Internet minus one share, with conditions on assuming certain loans. This deal is part of a deliberate long-term strategy of securing strategic stakes in leading private companies in key companies that, like India, will likely become important Internet markets in Asia.
Tencent has granted MIH India Global Internet a perpetual and royalty-free license, mainly to use certain of Tencent’s software, content and trademarks, as well as some other unspecified materials, in India, for nil consideration.
Update: Financials of MIH India Global Internet
If you are wondering how much these startups maybe spending and earning here is a brief insight.
- Consolidated total assets of MIH India Global Internet were approximately Rs 320.82 million
- Net liabilities at the end of FY08 – Rs 741.58 million
- Consolidated net loss (after taxation and extraordinary tems) for the years ended 31 March 2008 and 31 March 2007 were approximately Rs 585.45 million and Rs 196.88 million