Nazara Technologies has proven to be a guiding light in the Indian Real Money Gaming industry.
Founded by Nitish Mittersain in 2009, Nazara currently operates in more than 75 countries and is expected to IPO soon this year. Among its investors, Westbridge Capital Partners, IIFL, Turtle Entertainment, Rakesh Jhunjhunwala, Sequoia Capital, ESL and others have gaven in total $102 million.
Meanwhile, Nazara Technologies as of Nov 2019 has funded 13 start-ups who have a total growth capital of $50 million in a period of just 18 months. With 100 million plus monthly active users, Nazara is a powerful player not just in India but major African markets and the Middle East. Many of these companies operate in the Real Money Games ecosystem and the investment are not just limited to India either.
1. Nazara Technology invests in SportsUnity
7.5 Cr investment in Delhi based Sports Unity Private Limited which runs Qunami. It’s a Real Money Quiz App which had previous received a loan for 6.25 Cr from Azimuth Investments who in-turn are selling this debt in the form of equity to Nazara Tech. The company was started in June 2015 with a focus on Sports news and content. User feedback and to increase engagement, Trivia as a feature was added to the product and the pivot became obvious next step.
On average, a paying user typically stakes upwards of Rs.300 with a 20 minute average time spent. Their association with MPL also brings in massive engagement and new users on to the platform. They are currently working on a new Quiz based game called Platina, focused on school and college students.
2. Nazara Technology invests in CrimsonCode
Nazara Technologies has bought a 27.42% stake in Real Money Games developer, CrimsonCode. The investment has been made in Jatia Education Private Limited which owns and operates the company which has multiple Real Money Games in the market.
They have a Real Money skill based game called Top Quiz. The product has 500,000 plus registrations. The second game is called Mobile Baazi which is also a quiz based real money game but has a heavy tilt towards social gaming.
Co-founder of Crimson Code, Devarat Jatia said “Quizzing, combined with real money, has immense potential. We believe that having the backing of Nazara as an investor and publisher will provide us with a springboard to launch real money quizzes in 61 countries across the emerging markets where Nazara had its presence, as on September 30, 2017.”
3. Nazara Technology invests in HalaPlay
Daily Fantasy Sports and Bengaluru based HalaPlay launched their game in 2017. Seed round was raised from Kae Capital, AngelList and Nazara. For series A they have raised Rs.40 Cr from Nazara Technologies and Delta Corp India in March 2019. Here Delta holds 15.5% stake with 15.5 Cr investment. For 2017-18, the company had announced revenues of 2.98 Cr.
Manish Agarwal, CEO, Nazara Technologies says, “HalaPlay is a young team with great potential and we saw the appeal in their vision. They have already reached a great user base, and will continue to grow. We are confident HalaPlay, with this fresh round of funds, will ride the explosive growth of fantasy sports in India."
4. Nazara Technology invests in NZ World Kenya Ltd
Nazara started a subsidiary with 70% stake to enter the Real Money Game market in Kenya. They have also secured Kenya’s Betting Control Board betting license. In 2017, Kenya increased the tax rate for gambling revenue from 7.5% to 35% which came into force in Jan 2018. Later April 2018 a new amendment was introduced reducing taxes on revenues to 15% while adding a 20% tax of winnings. As per the Kenyan Revenue Authority website (https://www.kra.go.ke/en/helping-tax-payers/faqs/betting,-gaming-and-lottery-tax), that is the case as of now.
Nazara CEO mentioned that “Real Money gaming is popular in African countries like Nigeria, Ghana, Cameroon in addition to Kenya, primarily on account of a well laid out and clear licensing framework,”
As of reports from Nov 2019, Nazara Technologies Limited has pledged $20million in total investments for start-ups in the gaming and sports ecosystem. The investments will be spread across India, Middle East and Africa markets featuring 20 technology based gaming companies. Their presence in Europe however is very small and not a major focus. The company is also looking at an Initial Public Offering in the first half of 2020, while the regulators had approved the same back in 2018.
The approach by Nazara Technologies towards investments as explained by its CEO, Manish Agarwal is quite nuanced.
· Stage of Business growth
· Metrics and Installs
· Retention and Engagement
· Monetisation strategy
“What you have is a simple framework of acquisition, attention, engagement and monetisation”
If the product is launched, the above comes into play, however if the product is not ready for the market yet, the potential market share and founding teams experience and insights make all the difference.
As per Agarwal “Those with an interesting but unproven idea, we will invest Rs. 1-2 Cr and that will be risk capital,” he said. For companies that are in need of growth capital, Nazara will invest about $1 million. “And, for mature companies, we will do a larger round, which will involve primary and secondary transactions,”
To sum up the Nazara strategy and also a form of advice for startups that are looking to get funded, “if you are in your top five percentile whether in your long term retention, your virality, your monetisation or your engagement then you will be able to create a confidence in the investor that this game has legs to go.”
Some of their other investments are:
· SportsKeeda, a sports content creation media company
· NextWave Multimedia, which operates sports based mobile games
· Nodwin Gaming
· InstaSportz, offline gaming space company focused on VR
· MasterMind Sports, a sports game development company
· Truly Social, London based mobile game development studio
· MoongLabs, which creates IP based sports mobile games
· Kiddopia focused on education based mobile apps
· Bakbuk mobile games development focused on housewives
Friends of Nazara
Nazara has been using its investments not just to generate returns but also a self sustaining ecosystem around them.
“Over the past few years, we have been building a ‘friends of Nazara’ ecosystem, where we want to partner with companies and founders who are like minded and share the same DNA in terms of how the business should be done and can have synergies with our existing investees.”
With the company’s expertise and investments in markets across the world, Nazara seems to be a company many follow while those with a little more skin in the game, partner with. Will this be the first major Real Money Games network or ecosystem to emerge out of India or will it spread itself too thin across categories and remain mid-tier player. Nazara Tech is definitely a company to keep an eye on, in the RMG Indian market.