Game streaming and esports content platform Rooter has raised $16 million in a mix of equity and debt financing led by existing investor Lightbox, as the startup looks to capitalise on the surging popularity of gaming video content in the country.
The round also saw participation from investors such as Trifecta Capital, Pivot Ventures, Baldota Family Office, Global Play Media, Denlow Private Trust, Venture Catalysts, and Potential Ventures.
Existing investors such as Duane Park Ventures, LeAD Sports & Health Tech Partners, ADvantage VC, Goal Ventures, Capital A and Astarc Ventures were also part of the funding round. With this, Rooter has raised a total of $46 million in funding across multiple rounds.
Rooter CEO Piyush Kumar told Moneycontrol that the startup would use the capital raised to “crack” different monetisation models to grow the company and move towards profitability.
"Right now, brand monetisation is 90-95 percent of our revenue and the remaining 5-10 percent is the direct revenue we earn from users. But, in the next 12 months, we want to focus on scaling direct revenue as well" Kumar said.
Started in 2016 by Kumar and Dipesh Agarwal, Rooter started as a sports social network and pivoted to a game streaming platform in 2020 amid the Covid-19 pandemic.
It offers consumers a mixture of live streams, short-form content and videos from over a million gaming content creators across over 10 Indian languages. This includes prominent gaming personalities such as Jonathan Amaral (Jonathan Gaming), Lokesh Raj Singh (Lokesh Gamer) and Esports teams such as Team GodLike and Team OG. Rooter claims to have a user base of over 60 million.
The company claims to have achieved $7 million annual recurring revenue with an aim to cross $10 million ARR by the third quarter this year. It also hopes to hit profitability by April 2024.
Rooter's mobile applications allows users to purchase in-game currencies from a range of game titles along with its own virtual currency called Diamond that people can buy to gift creators of their choice.
In the coming months, Kumar said the company would experiment with subscriptions for certain premium content as well as a marketplace model but didn't divulge any further details.
Expansion plans
Rooter will also use the funds to invest in its technology capabilities, build a stronger recommendation engine and look at different technology collaborations that can help improve its ecosystem capabilities, he said.
Rooter plans to expand its presence across South East Asia and MENA (Middle East and North Africa) region in the future as well as scout for potential acquisitions in ancillary areas.
"In India’s fast-growing gaming content space, Rooter has set strong benchmarks on how to strike the balance between growth and operational sustainability - establishing rapid scale while maintaining a healthy balance sheet and strong unit economics" said Sid Talwar, Partner, Lightbox.
Abhishek Gupta, Partner, Trifecta Capital, said Rooter has a strong vision and a highly capable team that has not only demonstrated its ability to deliver results and growth but to also adapt, improvise, and innovate to stay ahead of the market.
"We particularly like how Rooter has placed itself at the intersection of the needs of brands, streamers, and viewers in the highly dynamic gaming content and esports streaming category they operate in, and the success they have found in suitably monetising these avenues," Gupta added.
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