Game streaming platform Loco has sold a majority stake to Redwood, a technology-focused investment company based in the UAE, for $65 million as the startup looks to expand into international markets.
Loco has confirmed this development but did not disclose specific details. However, the company stated that the transaction involves a mix of primary and secondary investment and will provide a full exit for Loco's existing investors.
Loco had raised around $51 million in total from investors such as South Korean gaming giant Krafton, crypto venture capital firm Hashed, Catamaran Ventures, Makers Fund, Lumikai, Korea Investment Partners and Hiro Capital.
Loco founders Anirudh Pandita and Ashwin Suresh owned 15 percent of the company. Investors Krafton held 22.7 percent, while Hashed owned 22 percent, according to data from Tracxn. Other investors included Hiro Capital with 8.7 percent, Lumikai with 7.7 percent and angel investors with 6.7 percent.
Loco, originally a live trivia app, was acquired by the digital entertainment company Pocket Aces in 2018.
In June 2021, Loco was spun off as a separate company with a $9 million investment from Krafton, led by Pandita and Suresh, who also headed Pocket Aces, Pocket Aces' other co-founder, Aditi Shrivastava, continues to lead the company. In September 2023, music label giant Saregama acquired a 51.8 percent stake in Pocket Aces for Rs 174 crore.
This investment will enable Loco to enter multiple new markets within the next 12 markets. Loco founder Anirudh Pandita told Moneycontrol they are aiming to launch in the first global market in the next quarter, followed by an expansion to 4-5 markets in the subsequent months.
"Gaming is an integral part of the cultural zeitgeist globally, and we look forward to building a platform that is at the heart of this global movement. Live streaming enables authentic connection in a way that other mediums can’t match, and we want to put the fan at the center of this experience" Loco founders Anirudh Pandita and Ashwin Suresh said in a joint statement.
Loco had built a live game streaming platform, similar to Amazon's Twitch. The company claims that it has built "highly engaged communities" across various game titles, such as Battlegrounds Mobile India (BGMI), Free Fire, Call of Duty Mobile, Clash of Clans, Grand Theft Auto (GTA), and Valorant.
It has previously partnered with large publishers like Krafton, Activision, Ubisoft, and Riot Games, as well as global giants like the NBA and FIFAe.
In November 2023, Loco introduced microtransactions on the platform through an initiative called 'Loco VIP' that provides users with ad-free viewing and benefits such as chat badges, virtual gifts, and access to leaderboards among others.
The company however saw a significant decline in its daily and monthly active user base over the past year or so, as it cut down on its aggressive spends on getting prominent game streamers on the platform. Loco also let go 40 employees, representing 36 percent of its total staff, as part of its cost cutting efforts in November 2023.
Pandita told Moneycontrol they are expanding their team again to support the company's global expansion efforts. "We had about 50 people at the end of June-July. We will go to about 100-120 people by the end of the year" Pandita said.
Loco stated that it will soon announce new partnerships with major gaming companies, esports athletes, and streamers without disclosing any specific details.
Loco competes with players such as Lightbox-backed Rooter and Google's video streaming platform YouTube, which is the dominant player in the country's gaming streaming market.
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