GMR to buy stake in gaming startup Fantasy Akhada: Report

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Fantasy gaming startup Fantasy Akhada is in talks with GMR Sports, a GMR Group entity, to sell a significant stake at a valuation of $160-175 million (Rs 1,300-1,400 crore), Mint reported on January 5.

The transaction is likely to be in tranches, with GMR likely to top up in the subsequent rounds, buying out some early backers, the report said quoting four people aware of the development.

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According to the report, Fantasy Akhada, endorsed by celebrity cricket commentator Harsha Bhogle will see some of its early backers, angel investors and others exit through this deal.

“It is a mix of primary and a small secondary share sale, and some early investors are likely to sell,” one person aware of the development told Mint. “In subsequent rounds, the valuation will be doubled,” he added.

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According to data from Tracxn, Fantasy Akhada, which is backed by investors including Prime Securities Team India Managers Ltd, has raised $15 million so far. The founders hold a 44.41 per cent stake in the firm, while angel investors own 35.48 per cent, the report further added.

The firm will sell new shares of $50-60 million, the people cited above said on the condition of anonymity to Mint.

“The company is looking at realigning its cap table with longer-term investors being brought on board as gaming in India is expected to see manifold growth in the coming years,” the second person told Mint.

In an emailed query by Mint, the spokesperson for Fantasy Akhada said the details were inaccurate. An email sent to GMR Sports by Mint remained unanswered till press time.

Founded by Amit Purohit, Amit Bhardwaj, Ankit Upreti, Pratik Gosar, Sumit Jha and Sahil Ahuja in 2020, the platform helps users to make their virtual teams of real professional sports players. Apart from cricket, the company also offers users fantasy gaming experience across football and kabaddi, among other sports.

For GMR Sports that was incorporated in 2008 and houses the IPL franchise from New Delhi along with JSW Group; Uttar Pradesh franchise of the Pro Kabaddi league UP Yoddhas; and sports properties in the Middle East, entering fantasy gaming is a natural extension to its ambitions in the sports business, one of the person aware of the development told Mint.

“The group entity will end up owning a significant stake. The discussions now are centred around valuations,” the person added.

India has the world’s biggest fantasy sports market with over 130 million users and was valued at Rs 34,600 crore in 2021, with an expected annual growth of 32 per cent between 2022 and 2032, according to a report by Marketdecipher,

India offers a diverse selection of sports entertainment, from fantasy cricket to fantasy kabaddi. Gross income earned by the fantasy sports sector in FY20 was Rs 2,470 crore, while the market size was Rs 920 crore in 2019. This suggests that during the covid-19 lockdown, the size increased threefold, the Marketdecipher report said.