Nazara Technologies on September 12 announced an investment of Rs 982 crore into Moonshine Technology, the parent firm of online poker platform PokerBaazi, marking the largest infusion by the diversified gaming and sports media firm to date.
The deal is expected to significantly strengthen the company's presence in the online skill-gaming sector. It is also part of Nazara's push to boost its gaming business, which founder Nitish Mittersain believes would be the biggest revenue generator for the company in the coming years.
That said, the investment comes at a time when the burgeoning sector is still grappling with lack of regulatory clarity and the impact of the 28 percent Goods and Services Tax (GST) regime since last October.
The transaction structure
As per the deal, Nazara Technologies will initially acquire 47.7 percent stake in Moonshine Technology (Baazi Games) for Rs 831.5 crore in a secondary transaction from existing shareholders that include founder Navkiran Singh, co-founders Puneet Singh, Varun Ganjoo, Avneet Rana, and Anirudh Chaudhry, Gurjeet Kaur, private equity firm Bellerive Capital, and Influencers Interactive, a company that provides both skill-based games and games of chance.
Out of this, Rs 592.26 crore will be paid by the company through cash and the balance Rs 239.25 crore will be paid through a share swap, representing a 3.17 percent stake in the company.
Nazara Technologies, India's first publicly listed gaming firm, will also pump an additional Rs 150 crore in primary capital into Moonshine Technology through compulsory convertible preference shares.
“This investment in Moonshine Technology represents a significant step in our journey to strengthen Nazara’s position as India’s dominant diversified gaming platform," CEO Mittersain said in a statement. "PokerBaazi has not only emerged as the undisputed leader in online poker gaming in India but has also set new standards in user engagement, innovation, and overall experience. We’re excited to join forces with Navkiran, Puneet, and the entire Moonshine team, whose vision and leadership have been instrumental in shaping the poker landscape in India. Together, we look forward to driving growth in this space and taking Indian gaming to new heights, both domestically and globally."
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.
Mittersain has had earlier expressed his intentions to expand its skill-based real money gaming business through acquisitions, as the company eyes a 10-fold growth in revenue in the next five years. It offers an online rummy game called Classic Rummy after discontinuing fantasy sports app Halaplay. The segment contributed only about 2 percent to Nazara's overall revenue in Q1 of FY25.
In March, Nazara Technologies, one of the country's oldest gaming companies, had earmarked a $100-million war chest for global expansion over the next 24 months.
On the other hand, Moonshine Technology was started by Navkiran Singh in 2014. The firm initially focussed on online poker (PokerBaazi) and subsequently expanded into card games (CardBaazi), fantasy sports, and spectator gaming (SportsBaazi).
PokerBaazi is Moonshine Technology's flagship product that contributes more than 85 percent to its FY24 net revenue. The online poker platform claims to have had around 340,000 monthly active users as of May 2024. SportsBaazi, previously known as BalleBaazi, contributed more than 12 percent of the company's FY24 net revenue.
Read: Real-money gaming platform SportsBaazi aims to build a spectator gaming universe in India
Moonshine Technology reported a turnover of Rs 414.9 crore in FY24, as compared to Rs 268 crore in FY23. Earnings before interest, taxes, depreciation, and amortization (EBITDA) was at Rs 41.2 crore in FY24, as compared to Rs 27 crore in FY23.
“As the Indian gaming sector continues to grow, we firmly believe that partnering with Nazara Technologies is the right step toward advancing the nation’s gaming ecosystem. This partnership will also contribute to our aim for global expansion in the gaming space," said Singh, who also serves as CEO of Baazi Games.
Other prominent players who offer online poker in the country include Games24x7's PokerCircle, Head Digital Works's A23 Poker, Gameskraft's Pocket52, Mobile Premier League (MPL), and Spartan Poker, which was acquired by metaverse and gaming tech company OneVerse in February.
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