Indian gaming platform BuyStars raises $5 million in Lumikai-led round

Indian online gaming platform BuyStars said on Wednesday it had raised $5 million in a pre-series A round led by venture capital (VC) fund Lumikai as it looked to hire more employees and launch new games.

Existing investors Leo Capital and Chiratae, tech-focused VC funds, also participated in the round, which came on the back of a $4-million seed round in December 2021.

Lumikai, which came on board during the current round, declined to disclose the valuation of BuyStars. Lumikai has investments in gaming studios and streaming platforms.

Buystars Chief Executive Aman Satija said the platform, which offers fantasy games and trump cards, could turn profitable in the next year and a half and also raise its workforce to about 60 employees in the long term from the current 35.

The company is targeting a 10-fold growth in monthly gross merchandise value - the value of goods sold via a platform - over the next 12 months, from over $1 million currently, through new game launches, Satija told Reuters.

Online gaming revenue in India is expected to reach $1.9 billion by 2024 from $1.2 billion in 2021. India reports the largest number of gaming app downloads, according to government agency Invest India.

However, gaming apps in India face a roadblock as several state governments, including Tamil Nadu, crack down on them, arguing online contests offering cash prizes are addictive and can cause financial harm.

A senior executive at Lumikai said such measures in a country of over 1 billion people are "part of the course".

"There are certain states which have taken different approaches and that is to be expected in a market as diverse as India," Lumikai Founding General Partner Salone Sehgal said.