Nazara’s NODWIN Gaming Invests INR 33 Cr In German Firm Freaks 4U Gaming Via Convertible Note

Nazara Technologies’ esports subsidiary NODWIN Gaming has invested INR 33.26 Cr in Germany-based Freaks 4U Gaming GmbH via convertible note. 

Freaks 4U Gaming GmbH is a marketing services company for gaming and esports, delivering its services across the world.

“Nodwin Gaming International Pte. Ltd. (“Nodwin Singapore”), a wholly owned subsidiary of Nodwin Gaming Private Limited (“Nodwin”), material subsidiary of the company, has on December 28, 2023 signed agreements for subscribing to a Convertible Note of Freaks 4U Gaming GmbH, at a consideration of EUR 3,600,000 (equivalent to approximate INR 33.26 Cr), to be paid in cash,” Nazara said in an exchange filing. 

Nazara further said while both NODWIN Gaming and Freaks 4U Gaming are marketing services experts in gaming and esports, their strengths are respectively in mobile and PC-based games.

While NODWIN dominates in emerging markets like India, Freaks 4U Gaming GmbH leads in developed markets. With the recent investment, NODWIN aims to enhance its expertise in PC games. 

By joining forces, Freaks 4U Gaming GmbH and NODWIN aim to be more appealing to global consumer brands and game publishers, providing a seamless operation across both emerging and developed markets.

“If conversion option of the convertible note is exercised the same will be converted into 7,366 shares at a future date/conversion date. The percentage of shareholding will depend on the terms and conditions of the said convertible no,” Nazara added.

For the uninitiated, convertible notes are a type of debt instrument commonly used by startups to raise capital during their early stages. It involves investors lending money to a startup with the intention of converting it into equity at a later milestone, often the next equity financing round.

Earlier this year, NODWIN Gaming was planning to raise $28 Mn (INR 232 Cr) as part of a strategic funding round from new and existing investors. As per regulatory filings, Nazara has signed definitive and binding documentation for NODWIN to raise the capital from existing as well as new investors.

Back then Nazara said that NODWIN will utilise the fresh capital to expand and incubate new IPs as well as to venture into new territories. 

NODWIN Gaming has been on an acquisition spree this year. It acquired a 51% stake in mediatech startup Branded in an all-cash deal worth $1.3 Mn. In April last year, the esports company also picked up a 35% stake in gaming accessories brand Wings for INR 10.01 Cr. Prior to that, NODWIN acquired a 100% stake in licensed merchandising D2C brand Planet Superheroes in January 2022.

Its parent company also raised a fresh capital of INR 510 Cr from investors including Zerodha’s Nikhil Kamath and SBI Mutual Fund. Speaking to Inc42, CEO Nitish Mittersain had said that the company would invest the fresh funds in gaming studios capable of producing top-tier games tailored for both the Indian and global markets.