Gaming VC Firm Lumikai Launches $50 Mn Fund, Eyes Investment In 18-20 Startups

Gaming-focused venture capital (VC) firm Lumikai on Thursday (June 22) announced the launch of its second fund with a total corpus of $50 Mn. 

Founding general partner (GP) at Lumikai Salone Sehgal told Inc42 that the fund has already raised $25 Mn of the total corpus and intends to close the fund by the end of the year. 

The capital raise saw participation from marquee names such as Japanese gaming giants Mixi and Colopl, South Korea-based Krafton and Smilegate, Finland-based Supercell and Indian gaming major Nazara Technologies. 

Indian family offices such as the Jeejeebhoy family office, KCT Group, DSP Kothari, and Sattva Group also participated in the round. The fundraise also included angel investors and high net individuals (HNIs) such as ex-Napster CEO Jon Vlassopulos, Ben Feder, who is the former CEO of Take Two Interactive, Nodwin Gaming cofounder Akshat Rathee, founder of Gulf Islamic Investments Pankaj Gupta, among others. 

The funds will be deployed in pre-seed to Series A investment rounds of gaming and interactive media startups. Sehgal said that the fund will largely be deployed to invest in 18-20 early-stage companies over the course of next few years.

With Fund II, Lumikai will invest in five key thesis areas – gaming content and original intellectual property, creator economy, technology and infrastructure, applied game mechanics, and emerging technologies such as mixed reality,  generative AI, virtual identities as well as edge computing.

Besides, the gaming VC firm also announced the establishment of a separate $10 Mn alternative investment fund (AIF) for Indian limited partners (LPs), which will invite capital in local currency (INR).

“… Over the course of the last 3 years, we have seen 1,400+ deals and seen the industry attract investor interest, deepen founder quality and achieve liquidity events. We continue to remain bullish on the long-term potential of the India interactive market and this is our opportunity to build on the foundation we have laid,” said Sehgal. 

The fund will dish out cheques in the range of $200K to $1.5 Mn for the prospective portfolio startups. In addition, it also has provision for a follow-on capital of up to $2 Mn over the life course of its portfolio gaming startups. 

The firm has already shortlisted three deals as part of its Fund II, which are currently at the term sheet stage. Sehgal said that the fund intends to close the deals in the next few months. 

Founded in 2019 by Justin Shriram Keeling and Sehgal, Lumikai is a homegrown VC firm that focuses solely on the Indian gaming ecosystem and largely targets seed stage ventures. 

The second fund comes nearly three years after Lumikai unveiled its first fund in August 2020. The maiden fund backed startups such as game developer Bombay Play, game streaming platform Loco, and social gaming startup Elo Elo, among others. Fund I currently has $40 Mn worth of assets under management.

The VC fund claims that its portfolio companies have collectively raised north of $100 Mn and employ more than 300 people across the sector. 

Lumikai joins a growing list of homegrown and Indian VC firms that are accumulating dry powder to invest in local startups. Despite the adverse market conditions, global economic pressures and a funding winter, VC and private equity (PE) firms have raised capital to the tune of $3 Bn this year so far. 

Earlier in the day, Blume Ventures announced the first close of its new INR 400 Cr continuity fund, Fund 1Y, at INR 200 Cr. On June 21, climate-focussed venture capital firm Avaana Capital secured $70 Mn as part of the first close of its Climate and Sustainability Fund.

A few days ago, investment firm Airavat Capital also announced the launch of a global technology fund targeted at startups based out of GIFT City.

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