Japanese mobile entertainment giant Mixi has on August 8 announced the launch of a $50 million corporate venture capital fund dedicated to the India market, signalling the growing investor interest in the country's burgeoning digital entertainment industry.
Set up through a subsidiary called Mixi Global Investments, the fund will look to back early-stage startups in the digital entertainment and consumer services sector in the country.
This is the first time Mixi has set up a corporate venture fund for an international market outside Japan, although its Japanese counterpart has backed a few startups in Southeast Asian countries such as Indonesia.
"We identified India as the most lucrative and exciting, although a quite challenging place to start our global investment approach," Tomoharu Urabe, Principal Partner, Mixi Global Investments told Moneycontrol.
He said that the company will focus on investing in startups that are in the seed to pre-series B stage, with the cheque sizes initially ranging from $0.5 million to $2 million.
That said, he noted that they are still "starting up here" and may change their investment approach in the future. "We are currently discussing about how to set up a team in India," he said.
Read: Lumikai launches $50 million fund to back early-stage gaming startups
This launch comes at a time when the company is eyeing an expansion to overseas markets, particularly emerging countries, to grow its business and investments beyond its home market.
The firm, which is listed on the Tokyo Stock Exchange, plans to use 30-50 billion yen ($210 million - $350 million) on mergers and acquisitions as well as capital and business alliances over the next three years from FY2023 to FY2025.
A snapshot of Mixi's key business areas and investment portfolio
Urabe said that they see great potential in India, since people are spending more time and money on digital entertainment including mobile games here.
"India has a unique history. Unlike Japan, there was no console games or PC games culture but all of a sudden, everyone has a mobile phone. More people are playing games and even payments are getting better due to digital infrastructure such as UPI" he said.
Founded in 1999 by Kenji Kasahara, Mixi's flagship product was an eponymous social networking service that was started in 2004. The company went public on the Tokyo Stock Exchange in 2006 and at one point, it even rivaled social media giant Facebook with over 14 million monthly active users as of September 2012.
However, Mixi's popularity has faded significantly in the subsequent years. The company now operates a range of businesses in areas such as digital entertainment, mobile gaming, lifestyle, and sports. This includes its popular role-playing mobile game Monster Strike, and a family photo-sharing app FamilyAlbum.
According to its website, Mixi has also backed about 28 startups including the Japan-based mobile news unicorn SmartNews and is an investor in nearly 30 venture capital firms including India-based Lumikai, US-based Betaworks, and Singapore-based Play Ventures.
The company mentions that it has invested a total of around 70 billion yen (about $491 million) over the past four years (FY2019 to FY2022) in businesses. "We invest extensively in growth businesses and services that match our purpose, creating numerous synergies and contributing to business expansion," it said in a statement.
Revenues from India's digital media sector stood at Rs 57,100 crore in 2022, according to a recent FICCI-EY report. Of this, the online gaming segment clocked revenues of Rs 13,500 crore for the year.
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