Games24x7 plans to back startups beyond the gaming sector in India as the skill-based gaming unicorn aims to position itself as a technology company.
"While we're often typecast as a gaming company because we're called Games24x7, gaming is only incidental. At the heart of it, we are a technology company," Games24x7 co-founder Bhavin Pandya told Moneycontrol.
Pandya said they are focusing on startups who are exploring applications of artificial intelligence (AI) and machine learning across industries and domains. The firm is also weighing opportunities in deep technology, which combines hardware and software, such as creating integrated chips or motherboards.
"This will help solve some of the problems we are facing in India, as well as those around the world," he said.
To support this effort, Games24x7 is expanding the scope of its accelerator programme in its second edition that was announced on October 11. Now called TechXpedite, the programme spans 60 days and is designed to help startups in three key sectors - gaming, AI, and impact-driven inclusive technology - through product development, services, and research.
The unicorn has partnered with the Department for Promotion of Industry and Internal Trade (DPIIT) and governments of Karnataka and Telangana for this initiative. Amazon Web Services (AWS) will serve as a cloud partner.
Pandya said this initiative builds on Games24x7's earlier gaming-focused accelerator programme, GameTech Accelerate, which was launched in partnership with the Karnataka government in December 2023.
He mentioned that TechXpedite will host city-based chapters across five cities in India, including Delhi and Hyderabad, to engage startups from relevant sectors by providing access to mentorship and networking opportunities.
The company plans to select 10-15 startups for a structured mentorship programme where they will interact with industry experts, venture capitalists, and technology leaders in tailored sessions designed specifically to address challenges faced by startups looking to scale their business and operations.
These startups will receive credits of around $500,000 from over 30 partners including AWS, Canva, Notion, PayU, Zoho, and Zoom. In February 2025, select startups will be able to make a funding pitch to early-stage investors.
Read: Next 2-3 years in online gaming hinges on how we leverage technology, says Games24x7's Bhavin Pandya
Broader mandate for Games24x7 Ventures
Games24x7 Ventures, the firm's corporate venture capital arm, is also resuming investments with a broader mandate and will invest in startups participating in the accelerator programme, Pandya said.
Games24x7 launched Games24x7 Ventures with a corpus of Rs 400 crore in November 2022. However, the firm had paused investments amid a slew of challenges faced by the country’s skill gaming industry, including suspension in certain markets and the 28 percent goods and services tax (GST) regime implemented in October 2023.
"The business had been pushed back 15-18 months. Hence, we had to make sure we were focused on bringing the business back on track before we started allocating more funds," Pandya said. He added that the fund has two to three "promising" deals in the pipeline, although he did not disclose any further details.
These investments could help Games24x7 diversify its business amid a turbulent period for India's skill-gaming sector, which accounts for the bulk of revenues of the country's overall gaming industry.
The sector stands at a critical juncture at the moment, with its future resting on the implementation of a comprehensive regulatory framework in the country, impact of the upcoming court rulings related to GST notices, constitutional validity of state-level bans on real-money gaming formats, and the role states have in regulating the sector.
Pandya, however, said that they will continue focusing on gaming innovations. If the firm decides to explore other areas, it will do so by investing in people who are working to tackle those problems, he said.
Return to profitability
Founded in 2006 by Pandya and Trivikraman Thampy, Games24x7 operates a portfolio of skill-based gaming platforms including RummyCircle (Online Rummy), My11Circle (Fantasy Sports) and more recently, PokerCircle (online poker).
Games24x7 primarily makes money from the platform fees it earns from players for allowing them to participate in tournaments or contests across its platforms.
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The firm was last valued at $2.5 billion, when it raised $75 million in a funding round led by Malabar Investment and with participation from existing investors Tiger Global and Raine Group in March 2022. It claims to have more than 100 million users and has offices in Bengaluru, Mumbai, and New Delhi.
In March 2024, My11Circle outbid rival fantasy sports major Dream11 to become an official partner for the Indian Premier League (IPL) for five years. According to media reports, the platform is shelling out Rs 625 crore over the next five years for these rights.
For the financial year 2023 (FY23), Games24x7's revenue from operations surged by 70 percent to Rs 1,988 crore. Losses also narrowed by 29.4 percent to Rs 199.5 crore in FY23, from Rs 282.4 crore loss in FY22. Notably, Games24x7's FY22 loss was its first-ever loss in 12 years.
Pandya, however, expressed optimism that the company would return to profitability soon. "The reason we stepped into losses was very intentional. We really wanted to grow My11Circle. While we don’t believe in growing at any cost, it’s okay to take short-term pains for long-term gains, which is what we’ve done with My11Circle. And so, we should be back very soon."
Pandya mentioned that the firm also plans to focus on cross-monetising players acquired during the IPL tournament for its existing games, such as Rummy and Poker, as well as other games it intends to offer in the future.
He is also hopeful of getting clarity on the issue of retrospective GST sooner rather than later. "Once that happens, we can plan for other things. We can explore what else we can do out there. Can we build new games, or figure out if there are other opportunities we can explore or invest in? Right now, everything is gated since we are waiting to see what happens with the retrospective tax," Pandya said.
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