Skill-based gaming company Games24x7 said on March 30 that it has raised $75 million in funding led by Malabar Investment and participation from existing investors Tiger Global and Raine Group at a $2.5 billion valuation, making it the latest entrant to India's startup unicorn club.
The Mumbai-headquartered firm will be the third startup unicorn in the online gaming space, after Dream Sports which was last valued at $8 billion in November last year, and Mobile Premier League which was valued at $2.3 billion in September last year.
Nazara Technologies, which was India's first publicly listed gaming firm, currently has a market cap of Rs 5,250 crore (around $691 million).
Games24x7 plans to use the funds raised to accelerate its user growth, content development, and technological capabilities.
Founded in 2006 by Trivikraman Thampy and Bhavin Pandya, Games24x7 currently operates a portfolio of skill-based gaming platforms including RummyCircle (Online Rummy), My11Circle (Fantasy Sports), and U Games (Casual Games).
It claims to have more than 100 million users. The company says it has offices in Bengaluru, New Delhi, Miami and Philadelphia.
“We are extremely happy to partner with Malabar Investment and to see Tiger Global and Raine Group continue to repose their faith in us. This investment is a testimony not only to Games24x7’s performance but also to India’s immense potential as an online skill gaming market” said Thampy.
Co-founder Pandya also said in a statement that they will continue to "innovate, introduce new games, and contribute toward India's onward march as a global tech power" The Raine Group was the financial advisor to Games24x7 for this round.
Sumeet Nagar, Managing Director, Malabar Investments said "Games24x7 has built a highly profitable business with outstanding acquisition and retention metrics.
They have continuously improved on these metrics at a great scale, which we believe is quite a remarkable feat. This speaks of the data science capabilities, the rigour, the thoughtfulness, and the strive for excellence that the fantastic leadership team brings to the table"
Interestingly, this investment comes at a time when several Indian states like Andhra Pradesh, Telangana, Tamil Nadu and Kerala have either banned or are mulling bans over real-money games in the past year.
South India is an important market for games like Rummy which has a good penetration in these states.
However, Karnataka moved the Supreme Court on March 29 challenging the Karnataka High Court's judgement that recently struck down the contentious provisions of the state's online gambling law which had outlawed all forms of online gaming where transfer of money is involved.
The February 14 judgement had provided a major relief to the skill-based gaming firms such as Games24x7, enabling them to restart operations in Karnataka after it was suspended in October last year.Tamil Nadu has also approached the Supreme Court to restore the ban on online gambling in November 2021 after the Madras High Court struck down its amendments as unconstitutional in August 2021.