Delhi NCR-based online gaming startup Zupee has raised $72 Mn, taking the total Series B funding to $102 Mn. The funding takes the company’s valuation to $600 Mn, up from $530 Mn after it raised the first tranche ($30 Mn) in August 2021.
The round saw participation from investors such as WestCap Group, Tomales Bay Capital, Nepean Capital, AJ Capital, Matrix Partners India and Orios Venture Partners.
Alongside the fundraise, Zupee has also announced that it has partnered with Reliance to roll out its game on Jio’s 5G smartphones. According to Zupee, over 150 Mn 5G handsets are expected to be sold before the commercial launch of 5G in India. Thus, it aims to aggressively capture as much of the market as possible with this partnership with Jio, with a special focus on reaching India’s remotest areas.
The funds raised will help Zupee develop new products, enhance its immersive design experiences, expand into new geographies, ramp up marketing, reach, penetration, research and innovation and hire top talent. The startup plans to launch newer entertainment products aimed at engaging, empowering and entertaining its users.
The partnership with Reliance is aimed to offer online gaming products to Jio users via Zupee’s game formats and monetisation avenues. The startup aims to be a bigger part of the online gaming market expected to reach $1.6 Bn by 2025.
Founded in 2018 by Dilsher Singh and Siddhant Saurabh, Zupee is a live quiz platform where users can compete for real cash prizes. The startup claims to have over 70 Mn downloads. To date, Zupee has hosted $1.2 Bn games and registered a 535% year-on-year growth.
The startup also houses a Zupee Skilling Academy (ZSA), where it trains Indian youth with necessary job-focussed skills such as search engine optimisation, running search ads, social media marketing and analytics, among others.
Most recently, ZSA partnered with NIIT Foundation to launch a hybrid model — an LMS where students will have access to training modules, AV media, ebooks, and other curriculum-based study and testing material.
A Fundraise When Gaming Startups Are In A Legal Maze?
Indian online fantasy sports platforms have witnessed a surge in users in the last two years; majorly due to the onset of the pandemic, and the increased internet and smartphone usage. Further, the online gaming industry has the potential to generate $2 Bn in revenues by 2023 and is currently valued at $1 Bn+.
Yet, like certain segments such as cryptocurrency, online gaming is an ‘ambiguous’ concept for regulators despite the boom. For example, fantasy gaming platform Dream11 suspended its operations in Karnataka in October 2021. A complaint was lodged against its founders — Bhavit Sheth and Harsh Jain, against the backdrop of a recent ban imposed by the state.
Karnataka banned games of chance — games entirely based on random factors of any type, like rolling a dice, playing cards, etc. But what constitutes a game of chance or a game of skill, is still ambiguous.
In the ensuing debate, Tamil Nadu promulgated an ordinance to prohibit even games of mere skill (if played for stakes) as wagering or betting in cyberspace. This led to online gaming companies scrambling to obtain a stay on the ordinance — which the Madras High Court granted.
While the governments of Karnataka, Kerala, Tamil Nadu, Odisha and Assam think of fantasy gaming as a game of chance (which is prohibited all over India), the Supreme Court, the governments of Punjab, Haryana, Maharashtra, Sikkim, Nagaland, others have called fantasy gaming as a game of skill (which is acceptable).
Online gaming startups are currently caught up in a labyrinth of compliances. Since there is no centralised framework in this space, states have come up with their own law. Thus, lawyers are game-testers for these companies, scrutinising games before they are published.
The lack of regulatory clarity does impact investor interest and confidence in the gaming sector, but gaming companies are going beyond market share these days and looking to influence other sectors too — take for example Nazara Tech. Nazara has invested and partnered with startups in verticals beyond gaming such as entertainment, digital media, among others post its acquisition in NODWIN Gaming.
Thus, despite the ambiguity in the online gaming space, Zupee’s fundraising as well as the partnership with Jio, signals a boost to the Indian fantasy gaming industry.