Anuj Tandon has joined Bitkraft Ventures, a seed-stage investor for interactive media and video games, as associate centered on the fast-growing Indian sport market.
Tandon brings almost 15 years of expertise as a gaming entrepreneur, govt, and investor in India to Bitkraft’s staff, establishing the enterprise capital agency’s footprint within the area. That may be an enormous deal, as a single associate can do quite a lot of offers to kick off investments and construct a sport ecosystem.
India’s on-line gaming market is without doubt one of the quickest rising on this planet as per the newest report from PwC, projecting to develop at 14.5% between 2023 and 2028, almost double gaming’s world development. Tandon’s expansive community in India offers Bitkraft a strategic opening into this quickly increasing market.
As a Bitkraft associate, Tandon will search to spend money on modern Indian gaming and interactive media corporations, with a selected give attention to AI, video games tech, and content material—making the interactive media VC agency one of many first world early-stage funding platforms within the nation.
Tandon’s expertise consists of efficiently main Krafton’s investments in India and the Center East/North Africa, bringing the billion greenback leisure model Yoozoo Video games to the area, and extra. Earlier than becoming a member of Bitkraft, Tandon was the CEO of Gaming at JetSynthesys, India’s main digitalconglomerate the place he managed all their gaming belongings.
India has been a software program improvement powerhouse for fairly a while already with a deep pool of technical expertise. The Artistic and Leisure trade has been selecting up visibly during the last decade and the Indian gaming trade revenues are projected to double, reaching $7.94 billion by 2028 (Supply: PwC).
A second technology of video games entrepreneurs is forming and can got down to construct internationally profitable corporations. With Tandon’s experience, Bitkraft believes they are going to be outfitted to help the nation’s modern corporations and supply the sources they should obtain their objectives on a worldwide scale.
“We have made several investments in India already, but our ambition is to increase our activity and capital deployment in the country visibly going forward. This is where Anuj’s experience and network in the Indian games and entertainment industry is crucial to us and our ability to identify and partner with the most outstanding entrepreneurs in India,” stated Bitkraft founding common associate, Jens Hilgers, in a press release. “It is more than just having a person on the ground; it is the deep understanding of the market, the actors, the local preferences and dynamics from people to design and product to financing.”
At Krafton, Tandon constructed the corporate’s India and MENA technique, investing greater than $135 million in excessive development startups resembling FRND, Nautilus Cell, Nodwin, KukuFM and extra, in lower than two years. Bitkraft has greater than 130 portfolio corporations and it has $1.05 billion beneath administration. Hilgers based the agency in 2016. Now it has six funds. I interviewed Tandon not too long ago.
Right here’s an edited transcript of our interview.
Anuj Tandon (left) and Jens Hilger of Bitkraft.
GamesBeat: What led to this transformation for you?
Anuj Tandon: I’ve been within the sport trade for the final 14 years now. I began off at an organization known as Rolocule in India. I used to be a co-founder. That was again in 2010, when gaming was easier. Paid video games. There was no free-to-play on the time. We made some very cool video games. The corporate was finally acquired by Dream11, which is a fantasy gaming big in India. Then I labored for Nazara for a 12 months, constructing a sport publishing enterprise.
After that I labored for a Chinese language gaming firm known as Yoozoo Video games, at their India workplace. Yoozoo was a reasonably respectable firm, one of many first Chinese language corporations to enter the Indian market. I labored there for 4 and a half years, earlier than the entire India-China geopolitical factor occurred. Then I went to Krafton. Krafton is the maker of PUBG. I joined in a distinct function, as an investor. I deployed greater than $135 million for them in new age media and leisure, interactive media, and gaming. That was in India and the Center East. My final gig was as an working associate for various gaming efforts at an Indian firm, JetSynthesys.
That’s the background. Operator, investor, and entrepreneur. Bitkraft occurred as a result of I truthfully really feel we’re on the proper time in India. I’ve seen the journey of the Indian gaming market from inside and outdoors the trenches. It’s a really fascinating market. Now it’s beginning to present some indicators of monetization, of mass person penetration yielding precise robust revenues for sure video games. The second technology of gaming entrepreneurs is coming in. It’s a nascent market nonetheless. It’s immature by way of gaming expertise. However we’re seeing individuals who have carried out some exits. They’ve some liquidity. They need to construct sport corporations. It’s an fascinating time to enter the market.
GamesBeat: I wrote not too long ago about Lumikai’s report. They had been predicting that India’s gaming market was going to develop from $3.8 billion to $9.2 billion by 2029.
Tandon: Everybody has their completely different predictions. PWC is predicting it’s going to go from three to eight. There’s an optimism in regards to the market that I share. However greater than that, it’s one of many few markets the place there’s nonetheless development taking place. There’s political stability. There’s an enormous IPO marketplace for tech startups. India was one of many highest IPO markets final 12 months. Greater than 25 tech startups are planning to IPO subsequent 12 months. There’s quite a lot of liquidity taking place within the startup ecosystem, which has been constructing for the final 15 years. You’re beginning to see the flywheel shifting – investments, liquidity, exit.
I’d place it as just like what occurred in 2008 to 2012 in China. There was just one publicly listed gaming firm, Shanda Video games. In India there’s Nazara. Then a bunch of IPOs like Tencent, Yoozoo, Netease. All these guys went public. That’s the thrilling a part of all of this.
GamesBeat: There’s loads of room for extra enterprise corporations moreover somebody like Lumikai.
Lumikai’s challenge for the expansion of India’s sport market.
Tandon: The important thing differentiator is–gaming in itself is a worldwide enterprise. Content material from any nation can cross borders, be worldwide, and discover customers all over the place. I’ve been an entrepreneur myself. I raised funds in 2012 for gaming in India. The largest problem I’ve seen for startups is an absence of a peer community that’s extra world, an absence of a mentor community that’s extra world. India is a really immature gaming ecosystem. “Immature” is perhaps the flawed phrase. It’s very younger. Folks solely began enjoying video games in 2016. There was no console or PC cycle on any significant scale. Entrepreneurs constructing proper now are making errors that folks within the western and jap markets which have already made and realized from.
When your entrepreneurs need to do new issues and construct new issues, having a peer community that’s extra world, a powerful mentor community, that’s necessary. That’s why I believe a worldwide fund makes a lot extra of a distinction within the lives of those second-generation founders that need to construct world gaming corporations from Indian gaming corporations.
GamesBeat: How did you get in contact with Bitkraft? Had they been the marketplace for a while? What had been the circumstances that led them to get ?
Tandon: In my Krafton function, I had the gaming platform to take a position out there, construct a method, a thesis, all of that. The portfolio was fairly superior. Type of a self-plug there. However it’s a really respectable portfolio. That platform gave me a possibility to community with lots of people as effectively. Bitkraft already has 4 portfolio corporations with out even having a devoted technique up to now. That’s why they acquired in contact with me. I met Jens this 12 months at GDC. We began having discussions about technique. It’s been a decently lengthy means of understanding them. They’ve been monitoring the market, monitoring the individuals who’ve been out there. There are only a few people who find themselves each operators and buyers in gaming and interactive media in India. Only a few individuals have that native information.
GamesBeat: Was there an expectation you had, that this was shifting in parallel to one thing like China 10 or 15 years in the past?
Tandon: I labored in a Chinese language firm very intently with the founders there at Yoozoo. You already know Lin Qi, God relaxation his soul. He was the founding father of Yoozoo. He died in 2020, sadly. It was an enormous scandal within the Chinese language sport trade. However that gave me a entrance row view of how client gaming startups and gaming and interactive media scaled in China. What was the playbook? How did they do publishing? How did they do sport improvement? How do you scale reside streaming and esports?
My view is, sure, we’re lastly beginning to see the essential constructing blocks fall into place. For six to eight years it was all about customers. In the event you needed, as a client startup, to develop in India, it was all about DAU and MAU. However now you’re lastly beginning to see individuals speak about paying customers, about common income per person. These are actually making important numbers. When you’ve 450 million smartphone players within the nation, even for those who solely have 1-2% conversion, that may be a reasonably huge quantity. Even when the ARPPU is barely decrease, you possibly can generate an honest enterprise.
We’re following the identical footsteps, however I believe the ecosystem will likely be barely completely different than China. Our person base is extra westernized, at the least on the high. The center of the funnel goes to be extra just like China by way of their consumption habits and paying habits.
GamesBeat: What do you see on the alternative in made for India video games versus Indian corporations making world video games?
India’s sport market might triple in 5 years.
Tandon: I take into consideration two issues. Indian content material being exported in gaming, that’s a no brainer. World cultural shifts occur each few years. Korean content material, Japanese content material, some stick and a few don’t. Indian content material goes to be massively produced for a worldwide viewers. There’s an enormous Indian diaspora in quite a lot of nations that can devour Indian content material and gaming.
India to India, already we’re seeing some indicators. In the event you take a look at the highest MAU and DAU video games, they’re native board video games, native card video games that persons are enjoying. That’s the primary signal that Indians are extra concerned with enjoying extra native content material than world. In fact, the funds and class of sport improvement continues to be reaching. I’m bullish on each. I believe as a right away tactical alternative, India to world will likely be a greater alternative. However definitely India to India makes a lot sense. There’s quite a lot of native tales. There’s a historical past to it. When tv began in India, when animation began in India, world content material dominated the Indian scene. Slowly however certainly, although, Indian content material began to dominate. That’s occurred with different media and leisure, and I believe it’s going to occur with gaming as effectively.
GamesBeat: What classes do you want to concentrate to so far as the potential for Bitkraft investments?
Tandon: We’ll nonetheless comply with our core thesis. You have got content material. You have got interactive media. Utilized sport mechanics, infrastructure instruments, and know-how for gaming. We’re not shifting from our 4 core pillars of investments we do. Will probably be just like what we already do globally. However there will likely be distinctive native options and native corporations that we’ll discover on this area.
GamesBeat: You talked about a number of investments already. Is there a fund that’s largely related to this? Has a few of that began to get deployed already? Or are you coming in recent, not having carried out an funding but?
Tandon: As a platform Bitkraft has already invested in India by means of its varied funds. There are three to 4 corporations that we have already got, and which can be doing very effectively. Going ahead, there are going to be a number of extra corporations. The precise technique that can play out continues to be a piece in progress. The entire level of hiring a neighborhood associate is to give attention to that space extra, and in different rising markets as effectively, just like the Center East.
GamesBeat: Does Bitkraft have extra native companions world wide, or are you one of many first?
India’s mid-core gaming market is robust.
Tandon: Now we have a really numerous staff geographically. We’re situated all over the place. Now we have a principal in Singapore that space. We beforehand had a associate in Korea. However at a associate degree that is the primary, so far as I do know, the primary strategic give attention to a market like this that deserves particular consideration. That is the primary time we’re localizing in India.
GamesBeat: Do you see different game-focused enterprise capital funds doing this, discovering companions in India or in any other case investing in Indian sport corporations?
Tandon: There are different giant gaming funds that even have quite a lot of Indian offers. However most of their sourcing community is thru native VCs, which should not have thesis-based gaming-focused investing. There’s curiosity, however there’s no consistency or give attention to this particular space. For my part, this can be a massive validation for the market. It reveals there’s quite a lot of potential, that a big fund like Bitkraft has a devoted technique for rising markets and India.
GamesBeat: I not too long ago spoke to Dino Ying from VSPO and Hero Esports. He talked about investing in esports in China a very long time in the past, and the way lengthy a street that’s been. They finally discovered recognition from the Saudis. The Saudis made an enormous funding. That made it way more world as an effort. He talked about how he needed to be affected person for a few years, enduring quite a lot of losses earlier than it will definitely grew to become a greater enterprise. Is that one thing that you just foresee Indian corporations nonetheless having to take care of, particularly within the esports class? Is there an extended street to look ahead to nonetheless?
Tandon: Particularly for esports–considered one of my first investments at Krafton was Nodwin Gaming. Additionally they acquired funding from Sony and Nazara. That’s one firm that’s worthwhile in esports in India. It’s tripled in valuation during the last three years. It’s scaling very quick. Sure, you need to be affected person in sure genres and subgenres or sectors. Endurance issues. However the strategic alternative of this market, by means of an investor lens, may be very excessive. There are corporations which can be going to go public, they usually’ll purchase startups for diversification for no matter cause. There’s quite a lot of strategic curiosity out there to increase. From a fund perspective that’s an incredible place to be. Even when there’s money circulation or profitability points in sure sectors, they’re good acquisition targets. We’ve seen that with VSPO.
GamesBeat: Do you’ve some other feedback on explicit sorts of corporations which can be enticing, or areas inside India the place you would possibly focus?
Tandon: India is a big nation by way of space, however the principle facilities of entrepreneurship for many of the tech startups are in three to 4 areas: Bangalore, the Mumbai cluster that features Pune, New Delhi, and to some extent Hyderabad and the remainder of the smaller cities. These are the place many of the startups are geographically. However quite a lot of Indian founders are already aspirational so far as reaching out to world buyers. The information that worldwide buyers deliver to founders has helped with their worldwide growth. The profile is approach higher than what a neighborhood enterprise capital fund would have. That’s my considering. That’s how we’ll have the ability to get quite a lot of good high quality entrepreneurs to work with us.
GamesBeat: Have you ever identified Jens Hilgers since earlier than coming to Bitkraft?
Tandon: In fact. We’ve interacted for 3 or 4 years. We’ve at all times saved in contact in regards to the Indian market. I’ve been in contact with most world buyers, as a result of each time they should perceive the market in India or the Center East–there are only a few individuals who have truly carried out investments in these areas and efficiently acquired studios. There’s quite a lot of curiosity in an individual like that in these areas for knowledge-gathering and so forth. Jens has been very curious in regards to the market. The time to do it’s most likely now. Two or three years in the past, it wasn’t a really enticing early stage funding market.
GamesBeat: How secure has the job market been in India? Within the U.S. and the west generally, the final 30 months have seen fixed layoffs. One consequence is that there was no scarcity of expertise out there to go to startups. Loads of startups have been shaped by groups that had been let go. Has that occurred in India as effectively? Is there one other supply of expertise that you just discover there?
The general sentiment is optimistic as effectively. India is the fastest-growing economic system on this planet at this level. Loads of elements are contributing. The macro tailwinds are very robust.
Lumikai’s knowledge on India’s sport market.
GamesBeat: Have Indian sport corporations picked up quite a lot of expertise from the tech sector generally?
Tandon: If you consider the businesses the place individuals get their expertise, there are quite a lot of facilities in India. Zynga has a reasonably huge staff in India. To provide an instance, Zynga alumni have generated greater than $600-700 million in enterprise worth, simply in new gaming startups they’ve created within the final 5 to 6 years. These are money exits. PlaySimple, Moonfrog, these two corporations had been acquired by MTG and Stillfront. There are numerous others, in different sectors as effectively, the place Zynga alumni have had an impression. Only one firm has made that impression. Then you’ve EA. They’ve a staff the place individuals have branched off into startups. Ubisoft has round 1,200 to 1,400 individuals in India. Scopely now has lots of people.
There are quite a lot of offshore facilities that had been created the place individuals have leveled up within the worth chain and began operating their very own video games. Loads of Indian startups in gaming which can be getting funding have additionally began to rent western expertise. As you stated, the job scene within the western markets isn’t nice. I’ve seen quite a lot of good high quality western expertise coming into India and constructing studios with their expertise. One in all them is a portfolio firm of ours, LILA Video games. Joseph Kim moved to arrange a studio in Bangalore. That’s a worldwide founder organising a staff in Bangalore to construct video games.
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