Skill gaming firm WinZO concludes 4th round of ESOP buyback

The ESOP buyback was offered to those with over 18 months at WinZO. This comprised about 40% of team, with 32% actually liquidating.

Skill gaming platform WinZO on August 8 announced the conclusion of its fourth round of Employee Stock Options Plan (ESOP) liquidation.

This move is part of the company's efforts to attract and retain top technology and product talent amid raging industry headwinds, including the impact of the 28 percent Goods and Services Tax (GST) regime. The company previously conducted three rounds of ESOP liquidation between 2021 and 2023.

WinZO co-founder Saumya Singh Rathore told Moneycontrol that the offer to liquidate was extended to all employees who have spent more than 18 months at the company. This constituted about 40 percent of the company's workforce, out of which 32 percent actually liquidated. However, she didn't disclose the size of the liquidation.

WinZO employs 200 people, 90 percent of whom are in tech and product roles.

"We have built a very lean team. Our priority has always been attracting and retaining top talent, ensuring they have a clear growth path and stability," Rathore said.

In the last 12 months, the company claims to have filed more than 25 technology patents across the world for its super computing technology, real-time communication innovation, and artificial intelligence (AI) applications in content creation.

Read: Skill gaming firm WinZO's FY23 revenue jumps 182% to Rs 687 crore

The new 28 percent GST regime has led to a significant rise in the tax outflow of companies in the real-money gaming sector, increasing by as much as 350 to 400 percent, industry executives and other stakeholders have previously told Moneycontrol. It had also resulted in a wave of layoffs across the sector, with many startups even shutting down in the past year.

Rathore said that the sector, once celebrated, now faces challenges in hiring due to changes in regulations and business profiles.

Real-money games, where the transfer of money is involved, forms the bulk of revenues of India's overall gaming industry that clocked a topline of $3.1 billion in FY23, marking a 19 percent growth from $2.6 billion in FY22. The sector is expected to touch an estimated $7.5 billion by FY28.

Started by Rathore and Paavan Nanda in 2018, WinZO enables developers to host their games on the platform and earn revenue through a microtransaction-based monetisation model ranging from Re 1 to Rs 10, instead of the traditional in-app purchases and advertisement-based models.

WinZO claims to have a portfolio of over 100 games spanning various genres, including strategy, sports, casual, card, arcade, racing and action, and board games across 12 languages such as English, Hindi, Gujarati, Marathi, Bengali and Bhojpuri.

The startup said its platform facilitates over four billion micro-transactions per month from about 200 million users.

WinZO also forayed into Brazil in October 2023 in a bid to diversify their operations. At the time, Nanda had told Moneycontrol that the firm's global expansion was "accelerated on the backdrop of the GST related developments".

Over the next 12-18 months, Rathore said they aim to expand to multiple global markets.

WinZO has raised a total of $100 million across multiple financing rounds from investors such as Griffin Gaming Partners, Maker’s Fund, Courtside, and Kalaari Capital until now.