Bitkraft Ventures to ramp up India investments amid gaming boom

Anuj Tandon and Jens Hilgers

Bitkraft Ventures, a US-based early-stage investor focused on gaming and interactive media, plans to ramp up its investments in India, as the market is expected to witness "exponential growth" over the next two to three years, India & UAE Partner Anuj Tandon told Moneycontrol in an interview.

"We believe that many second-generation entrepreneurs in gaming and interactive media will be actively coming out and building new companies over the next two to three years," Tandon said.

He added that the recent advances in artificial intelligence (AI) is also democratising many aspects of game development, making Indian developers better equipped to compete globally.

Bitkraft Ventures, which has over $1 billion in assets under management across six funds, hired Tandon, an industry veteran with over 15 years of experience, to establish its presence in the country in December 2024.

Also, read: Bitkraft Ventures sets base in India with Anuj Tandon as first partner

Tandon has previously helped South Korean gaming giant Krafton build an investment portfolio of local video game, esports and entertainment startups in India, while also playing a role in developing the company's overall market strategy.

In this role, he led investments of more than $135 million in startups including mobile game development studios Nautilus Mobile and Lila Games, audio content platform Kuku FM, esports firm Nodwin Gaming, Indian-language storytelling platform Pratilipi and audio romance and friend discovery startup FRND.

He also served as the CEO of JetSynthesys' gaming unit, a digital entertainment and technology firm where he managed all its gaming assets for about two years.

Tandon believes that India presents a compelling opportunity right now because the market timing, conditions, and monetisation proof points in the gaming and interactive media are now at an exciting stage.

"You have Nazara Technologies which is the only publicly listed gaming company (in India) and is performing well. You also have around 300 to 400 entrepreneurs building in the gaming and interactive media space, where the first proof points of monetisation have already started to emerge," he said. Tandon also noted that mergers and acquisitions are beginning to happen in the country, leading to increased liquidity.

Krafton recently acquired a controlling stake in JetSynthesys-owned Nautilus Mobile for Rs 118 crore, marking the company's first-ever acquisition in the country. "I think that is a big sign that global companies are willing to buy Indian IPs and made-in-India games," Tandon said.

Also, read: BGMI maker Krafton acquires controlling stake in Nautilus Mobile for Rs 118 crore

He cited the example of China, which was in a similar situation in 2008, after which at least 20 gaming companies went public in the subsequent six to seven years.

Founded by former Electronic Sports League chief executive officer (CEO) and G2 Esports chairman Jens Hilgers, Bitkraft Ventures has more than 130 companies across the world in its portfolio. Indian startups in its portfolio include mobile game development studio Lila Games and mobile gaming platform Gamezop.

The fund was also recently part of tech-focused entertainment startup Mythik's $15 million seed round, the largest seed investment in the media tech space.

Tandon said that the gaming sector requires dedicated investors because it is a nuanced industry with longer lead times in game development, and identifying investment theses and themes is very different from other sectors.

"Each game sub-genre, like action, arcade, and role-playing games, requires different thinking and investment theses regarding when to invest, how to invest, and the cross-pollination between sub-genres. You have to be very deep in the sector, else you will miss the next big hit" he said.

Where will Bitkraft invest?

Bitkraft's emerging markets team, which focuses on India and the Middle East, currently has two members. The fund plans to 'build muscle to achieve wider coverage' by hiring more people across these markets, Tandon said.

The firm intends to back mobile and PC gaming studios, tools that help in games monetisation and product management, user-generated content platforms, AI startups, and interactive media companies. Bitkraft will also look at startups that use gaming mechanics in their products.

"Some companies in the interactive content space, such as social dating or short drama platforms, have managed to monetize in India through local entrepreneurs more quickly than many games targeting the domestic market," Tandon said.

He further added "Real money gaming is an interesting space... it has scaled massively...but there are certain regulatory headwinds. We will wait for those to resolve."

Esports is however an area the firm is unlikely to invest in, Tandon said, as they believe the market is already mature and has established winners.

Impact of AI

Tandon said that emerging markets such as India and the Middle East will be the biggest beneficiaries from the latest AI advancements

"The biggest challenge in gaming especially right now is that we don't have people with the experience of building large games or technically skillful games - whether it's in art, programming, or other areas. AI is now democratising a lot of these capabilities" he said.

For instance, producing a great quality concept art for a global game earlier meant hiring a highly experienced artist with global exposure and waiting 3-4 days. Now, with the tools available and rapid innovation, it can be done within a day, Tandon said.

"A person with a strong idea and great design concept can still build a global game out of India, even with less funding, as long as they use AI effectively" he said "It’s not done yet—the space is transforming so fast and still very much in progress, but it will be a big boost for India"

The Indian gaming industry reported revenues of $3.8 billion for the financial year 2024, a 22.6 percent growth from $3.1 billion in FY23, according to a report by the gaming and interactive media venture fund Lumikai. Of the $3.8 billion in revenue, about $2.4 billion came from the real-money gaming segment.

The report also said the sector is estimated to cross $9.2 billion in revenue by FY29 at a 20 percent CAGR over the next five years.