Tencent Holdings Ltd is making a fresh bet in expanding its music portfolio and footprint by leading an investment in an Indian music streaming service.

The internet giant is leading a $115 million funding round, together with Times Internet Ltd, a local media and technology firm that incubated Gamma Gaana Ltd, the companies said on Wednesday.

The Indian startup will use the capital to further invest in technology to use artificial intelligence to personalize music experiences and further develop its subscription product for paying users, according to a joint statement.

Tencent president Martin Lau said the music streaming market in India is poised to accelerate thanks to more affordable mobile data plans driving smartphone penetration in the country.

Gaana basically serves the Indian market, offering free access to over 30 million Hindi, Bollywood, English and regional music to its 60 million users.

"In India, we're only 10 percent of the way toward building a business useful for 500 million people," said Prashan Agarwal, CEO of Gaana. "Tencent will be a great partner to help us enable India to access and enjoy unlimited music at their fingertips."

Underpinned by three separate platforms, Tencent Music has 120 million paying customers, twice as many as that of Spotify Ltd.

It has been aggressively tightening its grip on the global music streaming business, swapping shares with Spotify and signing deals with heavyweight musical labels including Sony BMG, Universal Music Group and Warner Music Group. It also operates Joox, a leading music streaming platform in Southeast Asia.

"Compared with the likes of Apple Music and Spotify, Tencent Music is no smaller in scale," said Ge Jia, a senior internet analyst at China Intercontinental Communication Center.

"It is a prerequisite to have high-quality content first before they make big strides overseas," he said.

The juggernaut dominates China's streaming-music market, with its Kuwo, Kugo and QQ Music platforms contributing to 76 percent of the $645 million sector last year, according to research firm DCCI.

"Apart from building up critical mass through its ubiquitous messaging app WeChat, Tencent Music can tap into the wealth of the group's sister entertainment resources, from video-streaming services to karaoke apps," said Liu Jiehao, a researcher at iiMedia Research.