India's Games24x7 raises $75m, becomes unicorn
Malabar Investment has led a USD 75m funding round for Games 24x7, an India-based mobile games operator, at a valuation of USD 2.5bn.
Existing investors Tiger Global Management and Raine Group also took part. Tiger Global previously backed the company in 2011 and 2012, while Raine Group joined the investor roster in 2019, according to a statement.
Games24x7 now claims to be India’s most valuable multi-game platform. Its offerings include RummyCircle, the country’s largest online rummy game, My11Circle, the second-largest fantasy sports platform, and U Games, a portfolio of casual games. Last year, the company boosted its sports portfolio with the addition of CricHeroes, a cricket scoring and performance analysis app.
In becoming a unicorn, it joins two other Indian online gaming companies: Dream Sports and Mobile Premier League (MPL). Both are primarily fantasy sports businesses, allowing users to create their own virtual teams based on real-life players participating in actual matches. Point scoring is based on on-field performance, and cash prizes are available for some contests.
In addition to its flagship cricket offering, My11Circle offers fantasy games in sports such as hockey, football, and kabaddi. It claims 100% growth in its user base over the past 12 months. Games 24x7 has more than 100m users across all its platforms, with RummyCircle still the main business driver.
An Economic Times article referenced on Games24x7’s website noted that the company generated USD 173m in revenue for the 12 months ended March 2021 and USD 50.5m in net profit.
The new funding will go towards accelerating user growth through the development of existing games and the introduction of new offerings, aimed at the Indian and international markets. There is a specific desire to diversify the skill gaming portfolio. Games24x7 will also invest in other gaming start-ups with a view to exploring synergies.
“This investment round feels particularly special, when the sentiment around growth stocks, especially in the new age sector has been sluggish. It reaffirms the importance of building a business on strong fundamentals,” said Bhavin Pandya, Games24x7’s co-founder and co-CEO. He established the business in 2006 with Trivikraman Thampy, a fellow New York University economics graduate.
Pandya also referenced the Indian government’s efforts to turn the country into a global gaming hub. This is the first major investment in the space since the announcement of the AVGC Task Force in last month’s budget. AGVC stands for animation, visuals, gaming, and comics.
“Games24x7 is a pioneer in the fast-growing online gaming industry in India and has built a highly profitable business with outstanding acquisition and retention metrics,” added Sumeet Nagar, a managing director at Malabar, a domestic investment firm.
“Not only that, they have continuously improved on these metrics at a great scale, which we believe is quite a remarkable feat. This speaks of the data science capabilities, the rigour, the thoughtfulness and the strive for excellence that the fantastic leadership team brings to the table.”
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