Nazara Tech's Nodwin Gaming invests €8 million in Germany's Freaks 4U Gaming

Nodwin Gaming has obtained a right to acquire majority control of Freaks 4U Gaming through a stock-swap in the future.

Nodwin Gaming, the esports subsidiary of Nazara Technologies, on January 31 announced an investment of €8 million (about Rs 75 crore) in Germany-based Freaks 4U Gaming in exchange for a 13.51 percent stake, as the company looks to bolster its capabilities in global markets.

As per the deal, Nodwin Gaming's Singapore subsidiary is investing €4.4 million (about Rs 41 crore) to buy a 7.4 percent stake. The firm is also converting its €3.6 million (Rs 33.26 crore) investment, made via a convertible note in December 2023, to a 6.1 percent stake.

Nodwin Gaming has also obtained a right to acquire majority control of Freaks 4U Gaming through a stock-swap with shares of Nodwin Gaming in the future.

Founded in 2011, Freaks 4U Gaming is a global full-service agency that specialises in esports and gaming. Headquartered in Berlin, Germany, the firm offers a range of solutions including strategic brand and marketing consultancy, social media and community management, editorial services, event management and logistics, and creative services.

It also delivers broadcast productions as one of the most prominent esports content creators worldwide apart from providing other community-oriented solutions. The firm has regional offices across Europe, Asia, and North America and employs over 190 people.

In August 2021, Freaks 4U Gaming raised €15 million from Co-Investor Partners, a private equity investor focused on high-growth, small and mid-sized companies in German-speaking countries. The company's turnover as of December 31, 2022 was at €38.25 million.

"Nodwin Gaming dominates in emerging markets (including India) while Freaks (4U Gaming) leads in developed markets...Together, Freaks (4U Gaming) and Nodwin Gaming will become even more relevant for global consumer brands and game publishers to operate seamlessly across emerging and developed markets" Nazara Technologies said in a stock market filing.

Collaboration across developed and emerging markets

As part of this agreement, Nodwin Gaming and Freaks 4U Gaming will start exclusively utilizing resources in each other’s key territories such as personnel, equipment and facilities.

Nodwin Gaming will get access to the Freaks 4U Gaming network across the developed markets, the PC ecosystem and its full-service capabilities. Meanwhile, Freaks 4U Gaming will get access to Nodwin Gaming’s emerging market network, facility capabilities in the mobile esports and youth culture ecosystems.

"Our collaborative journey with Freaks (4U Gaming) is growing stronger, especially in the realms of PC and mobile gaming. We hold continuous admiration for the team at Freaks as we jointly explore new avenues for cooperation," said Nodwin Gaming co-founder Akshat Rathee in a statement.

"This financial contribution is a testament to our unwavering commitment to advancing together on this shared venture" he said.

Nodwin Gaming said it will appoint ESL Faceit group's Niels Wolter as a nominee on the advisory board of Freaks 4U Gaming. He will consult on strategy, operations and integration, ensuring that the "synergy benefits identified by Nodwin Gaming and Freaks 4U Gaming are realised in a timely manner"

Michael Haenisch, CEO of Freaks 4U Gaming, said "Under Akshat’s leadership, Nodwin has become a force to be reckoned with in the emerging market and the global landscape of gaming and esports. I am excited to be working alongside Akshat and his team, as we further our discussions on how Freaks and Nodwin will collaborate and grow together in this strategic alliance"

Founded by Rathee and Gautam Singh Virk, Nodwin Gaming owns various IPs including prominent tournaments, festivals, and conferences in esports, gaming, music, comedy and live experiences that could appeal to gaming enthusiasts. It operates across multiple offices in South Asia, Singapore, the Middle East and Turkey.

In May 2023, Nodwin Gaming raised $28 million from new investors Sony Group Corporation and Innopark and existing investors such as Nazara, Krafton and JetSynthesys. The round valued the firm at $349 million, a significant jump from its earlier valuation of $135 million when it last raised funds in March 2021.

Over the past year or so, the startup has sought to expand its offerings in India and international markets through a series of acquisitions and investments.

Last week, it purchased Comic Con India, which hosts pop culture festivals in India, for Rs 55 crore to bolster its events portfolio.

In October 2023, Nodwin Gaming's Singapore unit acquired a 100 percent stake in game marketing agency Publishme for $2 million from parent firm Nazara Technologies and Publishme co-founder Ozgur Ozalp to boost its existing offerings for brands and publishers.

Other acquisitions and investments include a 51 percent stake purchase in Singapore-based live events firm Branded in an all-cash deal of up to $1.3 million in April 2023; buying the gaming and adjacent IP businesses of OML Entertainment for Rs 73 crore in September 2021, including the popular NH7 Weekender music festival; and picking up a 10.26 percent stake in digital media firm Rusk Media for Rs 10 crore in December 2021.

Nodwin Gaming also bought a 35 percent stake in gaming accessories maker Brandscale Innovations, which makes high-quality and affordable gaming audio gear under the brand name Wings in April 2022 and purchased comics, pop culture and superheroes merchandising retailer Planet Superheroes for Rs 4.9 crore in January 2022.