Mumbai-based gaming company Nazara Technologies has become the kingmaker in the Indian gaming startup ecosystem. Through multiple acquisitions and investments, the company has been increasing its dominance in the gaming industry in India as well as globally.
According to its filings at the Ministry of Corporate Affairs accessed by Inc42, Nazara Technologies is in talks to invest and acquire a Delhi-based real money gaming company, Delhi-based sports content website and increase the stake in a portfolio company.
Founded in 2000 by Nitish Mittersain, Nazara Technologies is a mobile games developer and publisher, which also runs its own seed fund for investment in the gaming and sports ecosystem.
In the past, Nazara has acquired NODWIN Gaming, DJuzz and MyGamma and has invested in startups such as MasterMind Sports, BakBuck, Truly Social, InstaSportz, Moong Labs, and HalaPlay. The new additions to Nazara’s portfolio are SportsKeeda, a sports content website run by Absolute Sports and SportsUnity, a mobile quizzing platform. Further, it has also increased its stake in HalaPlay, a real money gaming app.
All three investments have been approved by Nazara’s board in a voting ballot on June 9.
Nazara Invests In SportsKeeda
Founded in 2009 by Srinivas Cuddapah and Porush Jain, SportsKeeda is a sports news and content website, with articles, opinion pieces and forums for fans to interact with each other.
The company claims to have over 15 Mn users and 45 Mn unique users per month. Nazara is looking at a strategic investment to consolidate its holdings in Absolute Sports.
SportsKeeda fits well with Nazara’s plans of expanding the reach of content from English to vernacular languages and the video format. Nazara aims to create a subscription business model for sports enthusiasts and curate vernacular content within the sports domain for mass consumption.
According to a 2018 PwC report, in the next 3-5 years, the consumption of all types of sports content will grow. The report noted that the native, social and often viral nature of user-generated content is a strong recipe for reaching, engaging and monetising young audiences and achieving commercially-relevant levels of engagement with them.
“With an abundance of such content, the sports industry is in a great position to capitalise on the well-documented shift of our attention from traditional to social media platforms,” the report had said.
The company told its board that it sees a lot of synergy from the investment in Absolute Sports.
The filings showed that Nazara is proposing to acquire 111.8K equity shares of Absolute Sports at an issue price of INR 10 from existing investors, promoters and key managerial personnel. For considerations other than cash under a private placement basis, Nazara is offering 491.1K equity shares at a premium of INR 724 worth INR 35.76 Cr.
In a voting ballot on June 9, the promoters and the board approved the proposal. The transaction will be completed within 12 months of the passing of the resolution.
Acquiring Majority Stake In HalaPlay
Launched in 2017 by Swapnil Saurav, Prateek Anand, Ananya Singhal and Aman Kesari, HalaPlay claims to be witnessing a 10x user growth in the last 12 months, especially thanks to the bombardment of promotions during the ongoing cricket World Cup. HalaPlay competes with the likes of Dream 11 players in the real money fantasy sports gaming space.
The application is known for providing a real-time gaming platform which tries to increase sports fan engagement and includes features such as live commentary. Nazara Games, along with Kae Capital had earlier invested an undisclosed investment in HalaPlay earlier.
The filings showed that Nazara is now looking to increase its stake in HalaPlay to a majority one. Nazara had invested INR 9 Cr for 20.6% stake in HalaPlay and is now planning to partake in its Series A round by investing INR 40 Cr to increase its equity holding to up to 52.53%.
For this transaction of private placement in consideration other than cash, Nazara wanted to issue its 315.9K equity shares worth INR 22.99 Cr to HalaPlay’s investors— Kae Capital Fund II and Kalysta Capital Fund II for their 26.08K shares. This gives Kae and Kalysta 1.14% stake in Nazara.
In a voting ballot on June 9, the promoters and the board approved the proposal.
The real money online gaming market is estimated to be around INR 2,200 Cr and is pegged to be growing at a rate of 30% per year. Games in this category include rummy, poker, fantasy sports, trivia quizzing where players such as Junglee Games, Dream11, Ace2Three and BrainBaazi are some of the more popular names.
Nazara Invests In Sports Unity
Founded in 2016, Delhi-based Sports Unity offers a quizzing platform called Qunami as well as an eponymous cricket-based quizzing app.
The company claims to have over 100K users. Nazara is aggressively expanding in real money skill gaming space and while it has already got a stake in real money fantasy gaming, the quizzing app will give it another revenue channel, especially as quizzing has a broader appeal than fantasy gaming.
Nazara believes that Sports Unity has retained and engaged players in an impressive way on Qunami and will invest INR 7.09 Cr in equity shares of Sports Unity.
To begin with, Nazara has allotted its 34.9K equity shares worth INR 2.54 Cr to NBFC Azimuth Investments, which had given a INR 6.25 Cr loan to Sports Unity. In a voting ballot on June 9, the promoters and the board approved the proposal.
Digbijoy Shukla, head, startup ecosystem, AISPL had said in a GATO 2.0 conference that gaming industry can become a billion dollar market in India by 2020 as the number of mobile users are expected to reach 700 Mn by then.