Nazara Technologies has announced the acquisition of a 60 percent stake in Funky Monkeys for Rs 43.7 crore in an all-cash deal, marking the diversified gaming and sports media company's foray into physical entertainment.
Founded in 2012 by Binita Putcha and Sanjay Ghadiali, Funky Monkeys operates indoor soft play gaming and entertainment centres targeted at kids aged one to 12 years. It runs 11 centres across India, including in cities like Mumbai, Pune, Bengaluru, Surat, Ahmedabad, Amritsar, and Chennai.
Funky Monkeys reported a turnover of Rs 19.4 crore as of March 31, 2024 (FY 2023-24), an increase from Rs 17.2 crore in FY 2022-23. EBITDA (earnings before interest, taxes, depreciation, and amortisation) was at Rs 4.2 crore for the fiscal, as compared to Rs 4.3 crore in the previous year. The firm's primary revenue streams include birthday parties, events, walk-in visitors, and food and beverage sales.
With this acquisition, Nazara Technologies on December 2 stated that it intends to create an integrated ecosystem that spans both digital and physical gaming experiences, thereby offering a holistic entertainment experience to a young audience. Funky Monkeys has a significant growth potential, particularly in expanding into Tier 2 and smaller cities, the company said.
“With Nazara’s expertise and resources, we are confident we can scale Funky Monkeys and bring even more joy to children and families across India. We also see synergies with digital IPs owned by Nazara such as Kiddopia and will work to maximise these opportunities,” said Funky Monkeys co-founders Putcha and Ghadiali in a joint statement.
The deal also diversifies Nazara's revenue streams. The firm currently operates in three key sectors - gaming (World Cricket Championship, Kiddopia, Animal Jam, Classic Rummy etc), esports (Nodwin Gaming, Sportskeeda) and advertising (Datawrkz).
In August, Nazara Technologies also received a letter of intent in August to acquire Sachin Tendulkar-backed sports entertainment company Smaaash Entertainment through insolvency and bankruptcy proceedings. Smaaash Entertainment, which operates around 13 entertainment centres across India, was admitted to bankruptcy in May 2022.
Read: NSE should become Nasdaq in 5 years, more founders should list in India: Nazara's Nitish Mittersain
Nazara's first AI investment
Nazara Technologies, India's first publicly listed gaming company, also announced its first investment in the artificial intelligence (AI) sector. It is investing Rs 4.17 crore in Learntube.ai (previously CareerNinja), an AI-powered personalised learning platform, in exchange for a 4.68 percent stake.
Founded in 2017 by Shronit Ladhani, LearnTube combines gamification with personalised education to create an engaging and interactive learning platform for professionals. The startup's platform provides them with goal-specific learning paths and one-on-one AI coaching.
LearnTube stated that it analyses users' LinkedIn profiles, maps their skills, and creates tailored syllabi to address their learning needs. The startup also provides certified courses from partners such as Canva, Zoho, Hootsuite, and Wipro. It reported a turnover of Rs 1.41 crore in FY 2023-24, as compared to Rs 0.25 crore in FY 2022-23.
"LearnTube’s collaboration with Nazara is a bold step forward in reshaping professional learning and interactive media. We are excited to combine forces to lead innovation on a global scale," Ladhani said in a statement.
LearnTube also counts LetsVenture, LinkedIn co-founder Reid Hoffman’s Blitzscaling Ventures, Goodwater Capital, AngelList Quant Fund, and Google's AI Accelerator.
These deals were part of a series of investments announced by Nazara Technologies, one of the country's oldest gaming companies, aimed at bolstering its verticals and subsidiaries.
Read: Nazara, ONDC to launch an in-game monetisation platform gCommerce
More funds in Nodwin Gaming, Sportskeeda, and Datawrkz
Nazara is investing Rs 64 crore into its esports subsidiary, Nodwin Gaming, to fuel its global expansion efforts. The capital will help Nodwin Gaming enhance its capabilities, grow its portfolio of intellectual properties (IPs), and strengthen its presence in emerging markets, the firm said in a statement.
In November, Nodwin Gaming acquired Trinity Gaming, a gaming content and marketing company, for Rs 24 crore. Started by Abhishek Aggarwal and Shivam Rao in 2019, the firm works with over 1,000 creators across platforms like YouTube and Facebook. It also works with prominent brands such as Samsung, Realme, iQOO, and Krafton, offering them content creation, digital marketing, and event management services.
Nodwin Gaming stated that it will expand the portfolio of Trinity to other emerging markets such as Africa, Southeast Asia, Central Asia and Middle East across its existing businesses and verticals. The company will also merge its Unpaused Talent business with Trinity, which will be led by Aggarwal and Rao.
Nazara Technologies is also investing Rs 69.17 crore into Absolute Sports, its subsidiary that operates sports media brands Sportskeeda and Pro Football Network, for the secondary acquisition of 18,330 shares arising from the exercise of ESOPs by the Sportskeeda management. As a result, Nazara will own a 100 percent stake in the company, making it a wholly owned subsidiary.
Absolute Sports CEO Ajay Pratap Singh will receive a consideration of Rs 24.35 crore for the sale of 6,500 equity shares, as part of this transaction.
Apart from this, the company's board has also granted an in-principle approval to infuse Rs 15 crore into its advertising business Datawrkz.
"Nazara is committed to building the largest diversified gaming and entertainment platform out of India and many of our initiatives announced today are geared towards propelling profitable growth in these strategic areas of our interest" Nazara founder Nitish Mittersain said in a statement.
In November, Nazara closed a Rs 855-crore funding round, that saw participation from existing and new investors including SBI Mutual Fund, CaratLane co-founder Mithun Sacheti and his brother, Siddharth Sacheti, and Plutus Wealth associate Junomoneta Finsol.
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