MPL’s Mayhem Studios Raises $20 Mn From Sequoia India, Steadview

Mayhem Studios, the mobile game development arm of gaming unicorn MPL, has reportedly raised $20 Mn in its Series A round led by Sequoia Capital India, with participation from Steadview Capital, Truecaller and others.

Per an ET report, Bing Gordon, chief product officer at Kleiner Perkins, has participated in the round in his personal capacity as well.

The publication, citing a source close to the game development studio, said that the development was shared with the employees at a recent town hall meeting. The source said the company plans to deploy the incoming funds to boost its capabilities and develop new games in India.

Incidentally, Sequoia, which led the funding round in Mayhem Studios, is also an investor in MPL. Launched in May 2022, the gaming studio develops AAA mobile games. The studio released its first gaming title shortly after its launch. Mayhem Studios competes with Dream Game Studios, a Dream11 subsidiary, and Nazara Technologies, among others.

Founded in 2018 by Sai Srinivas and Shubh Malhotra, MPL offers various gaming options, including skill-based games like daily fantasy sports and chess to casual games such as 8 Ball Pool and Fruit Ninja. The startup last raised $150 Mn in its unicorn round in September 2021.

In recent months, MPL has also diversified into Web3 gaming and launched the NFT marketplace Good Game Exchange (GGX) last month to tap into the play-to-earn gaming sector.

Mayhem Studios’ funding round comes days after the government notified the rules for online gaming and laid down a self-regulatory framework for online games to be certified as permissible or non-permissible.

Under the institutional framework, all online games would be determined as permissible or not by a self-regulatory organisation (SRO). Moreover, there will be multiple SROs.

Srinivas, CEO and cofounder of MPL said that the uniform legal framework provided by these rules will boost investor confidence, while he also lauded the distinction between online gaming and gambling.

Further, the online gaming industry might also be in line for more relief, as the Group of Ministers (GoM) may recommend an 18% tax on gross gaming revenue (GGR) versus an earlier-recommended uniform GST of 28%.

The GoM would also differentiate between games of skill and games of chance, a move requested by the industry for a long time.

On the other hand, the Finance Bill stipulated that online gaming is subject to 30% on any prize money customers earn. As such, while the online gaming norms brought legal clarity to some extent, the industry is still awaiting clarity on taxation.

India’s gaming market was estimated to stand at $ 2.6 Bn in FY22. It is now predicted to reach a size of $8.6 Bn by FY27, per a report by Lumikai. The number of gamers in India stood at 507 Mn in FY22, growing at a CAGR of 12% from 450 Mn in FY21.