Anuj Tandon has joined Bitkraft Ventures, a seed-stage investor for interactive media and video games, as accomplice centered on the fast-growing Indian sport market.
Tandon brings practically 15 years of expertise as a gaming entrepreneur, government, and investor in India to Bitkraft’s crew, establishing the enterprise capital agency’s footprint within the area. That may be an enormous deal, as a single accomplice can do loads of offers to kick off investments and construct a sport ecosystem.
India’s on-line gaming market is without doubt one of the quickest rising on the earth as per the most recent report from PwC, projecting to develop at 14.5% between 2023 and 2028, practically double gaming’s international progress. Tandon’s expansive community in India provides Bitkraft a strategic opening into this quickly increasing market.
As a Bitkraft accomplice, Tandon will search to spend money on modern Indian gaming and interactive media firms, with a specific give attention to AI, video games tech, and content material—making the interactive media VC agency one of many first international early-stage funding platforms within the nation.
Tandon’s expertise consists of efficiently main Krafton’s investments in India and the Center East/North Africa, bringing the billion greenback leisure model Yoozoo Video games to the area, and extra. Earlier than becoming a member of Bitkraft, Tandon was the CEO of Gaming at JetSynthesys, India’s main digital
conglomerate the place he managed all their gaming belongings.
India has been a software program growth powerhouse for fairly a while already with a deep pool of technical expertise. The Artistic and Leisure business has been selecting up visibly during the last decade and the Indian gaming business revenues are projected to double, reaching $7.94 billion by 2028 (Supply: PwC).
A second era of video games entrepreneurs is forming and can got down to construct internationally profitable firms. With Tandon’s experience, Bitkraft believes they are going to be outfitted to help the nation’s modern firms and supply the assets they should obtain their targets on a world scale.
“We now have made a number of investments in India already, however our ambition is to extend our exercise and capital deployment within the nation visibly going ahead. That is the place Anuj’s expertise and community within the Indian video games and leisure business is essential to us and our capability to establish and accomplice with probably the most excellent entrepreneurs in India,” stated Bitkraft founding normal accomplice, Jens Hilgers, in an announcement. “It’s extra than simply having an individual on the bottom; it’s the deep understanding of the market, the actors, the native preferences and dynamics from folks to design and product to financing.”
At Krafton, Tandon constructed the corporate’s India and MENA technique, investing greater than $135 million in excessive progress startups resembling FRND, Nautilus Cellular, Nodwin, KukuFM and extra, in lower than two years. Bitkraft has greater than 130 portfolio firms and it has $1.05 billion underneath administration. Hilgers based the agency in 2016. Now it has six funds. I interviewed Tandon lately.
Right here’s an edited transcript of our interview.
GamesBeat: What led to this transformation for you?
Anuj Tandon: I’ve been within the sport business for the final 14 years now. I began off at an organization known as Rolocule in India. I used to be a co-founder. That was again in 2010, when gaming was easier. Paid video games. There was no free-to-play on the time. We made some very cool video games. The corporate was finally acquired by Dream11, which is a fantasy gaming large in India. Then I labored for Nazara for a yr, constructing a sport publishing enterprise.
After that I labored for a Chinese language gaming firm known as Yoozoo Video games, at their India workplace. Yoozoo was a fairly first rate firm, one of many first Chinese language firms to enter the Indian market. I labored there for 4 and a half years, earlier than the entire India-China geopolitical factor occurred. Then I went to Krafton. Krafton is the maker of PUBG. I joined in a special position, as an investor. I deployed greater than $135 million for them in new age media and leisure, interactive media, and gaming. That was in India and the Center East. My final gig was as an working accomplice for various gaming efforts at an Indian firm, JetSynthesys.
That’s the background. Operator, investor, and entrepreneur. Bitkraft occurred as a result of I truthfully really feel we’re on the proper time in India. I’ve seen the journey of the Indian gaming market from inside and outdoors the trenches. It’s a really fascinating market. Now it’s beginning to present some indicators of monetization, of mass consumer penetration yielding precise robust revenues for sure video games. The second era of gaming entrepreneurs is coming in. It’s a nascent market nonetheless. It’s immature by way of gaming expertise. However we’re seeing individuals who have performed some exits. They’ve some liquidity. They need to construct sport firms. It’s an fascinating time to enter the market.
GamesBeat: I wrote lately about Lumikai’s report. They had been predicting that India’s gaming market was going to develop from $3.8 billion to $9.2 billion by 2029.
Tandon: Everybody has their completely different predictions. PWC is predicting it’ll go from three to eight. There’s an optimism concerning the market that I share. However greater than that, it’s one of many few markets the place there’s nonetheless progress occurring. There’s political stability. There’s an enormous IPO marketplace for tech startups. India was one of many highest IPO markets final yr. Greater than 25 tech startups are planning to IPO subsequent yr. There’s loads of liquidity occurring within the startup ecosystem, which has been constructing for the final 15 years. You’re beginning to see the flywheel transferring – investments, liquidity, exit.
I’d place it as much like what occurred in 2008 to 2012 in China. There was just one publicly listed gaming firm, Shanda Video games. In India there’s Nazara. Then a bunch of IPOs like Tencent, Yoozoo, Netease. All these guys went public. That’s the thrilling a part of all of this.
GamesBeat: There’s loads of room for extra enterprise firms moreover somebody like Lumikai.
Tandon: The important thing differentiator is–gaming in itself is a world enterprise. Content material from any nation can cross borders, be worldwide, and discover customers in all places. I’ve been an entrepreneur myself. I raised funds in 2012 for gaming in India. The largest problem I’ve seen for startups is an absence of a peer community that’s extra international, an absence of a mentor community that’s extra international. India is a really immature gaming ecosystem. “Immature” is likely to be the incorrect phrase. It’s very younger. Folks solely began enjoying video games in 2016. There was no console or PC cycle on any significant scale. Entrepreneurs constructing proper now are making errors that folks within the western and jap markets which have already made and realized from.
When your entrepreneurs need to do new issues and construct new issues, having a peer community that’s extra international, a powerful mentor community, that’s vital. That’s why I feel a world fund makes a lot extra of a distinction within the lives of those second-generation founders that need to construct international gaming firms from Indian gaming firms.
GamesBeat: How did you get in contact with Bitkraft? Had they been the marketplace for a while? What had been the circumstances that led them to get ?
Tandon: In my Krafton position, I had the gaming platform to take a position out there, construct a technique, a thesis, all of that. The portfolio was fairly superior. Type of a self-plug there. However it’s a really first rate portfolio. That platform gave me a possibility to community with lots of people as nicely. Bitkraft already has 4 portfolio firms with out even having a devoted technique thus far. That’s why they acquired in contact with me. I met Jens this yr at GDC. We began having discussions about technique. It’s been a decently lengthy strategy of understanding them. They’ve been monitoring the market, monitoring the individuals who’ve been out there. There are only a few people who find themselves each operators and traders in gaming and interactive media in India. Only a few folks have that native data.
GamesBeat: Was there an expectation you had, that this was transferring in parallel to one thing like China 10 or 15 years in the past?
Tandon: I labored in a Chinese language firm very intently with the founders there at Yoozoo. Lin Qi, God relaxation his soul. He was the founding father of Yoozoo. He died in 2020, sadly. It was an enormous scandal within the Chinese language sport business. However that gave me a entrance row view of how shopper gaming startups and gaming and interactive media scaled in China. What was the playbook? How did they do publishing? How did they do sport growth? How do you scale stay streaming and esports?
My view is, sure, we’re lastly beginning to see the fundamental constructing blocks fall into place. For six to eight years it was all about customers. When you wished, as a shopper startup, to develop in India, it was all about DAU and MAU. However now you’re lastly beginning to see folks discuss paying customers, about common income per consumer. These at the moment are making vital numbers. When you have got 450 million smartphone avid gamers within the nation, even in case you solely have 1-2% conversion, that may be a fairly large quantity. Even when the ARPPU is barely decrease, you may generate an honest enterprise.
We’re following the identical footsteps, however I feel the ecosystem might be barely completely different than China. Our consumer base is extra westernized, a minimum of on the high. The center of the funnel goes to be extra much like China by way of their consumption habits and paying habits.
GamesBeat: What do you see on the alternative in made for India video games versus Indian firms making international video games?
Tandon: I take into consideration two issues. Indian content material being exported in gaming, that’s a no brainer. World cultural shifts occur each few years. Korean content material, Japanese content material, some stick and a few don’t. Indian content material goes to be massively produced for a world viewers. There’s an enormous Indian diaspora in loads of international locations that may eat Indian content material and gaming.
India to India, already we’re seeing some indicators. When you have a look at the highest MAU and DAU video games, they’re native board video games, native card video games that individuals are enjoying. That’s the primary signal that Indians are extra concerned about enjoying extra native content material than international. In fact, the funds and class of sport growth continues to be reaching. I’m bullish on each. I feel as an instantaneous tactical alternative, India to international might be a greater alternative. However definitely India to India makes a lot sense. There’s loads of native tales. There’s a historical past to it. When tv began in India, when animation began in India, international content material dominated the Indian scene. Slowly however certainly, although, Indian content material began to dominate. That’s occurred with different media and leisure, and I feel it’ll occur with gaming as nicely.
GamesBeat: What classes do you want to concentrate to so far as the potential for Bitkraft investments?
Tandon: We’ll nonetheless comply with our core thesis. You’ve gotten content material. You’ve gotten interactive media. Utilized sport mechanics, infrastructure instruments, and know-how for gaming. We’re not transferring from our 4 core pillars of investments we do. Will probably be much like what we already do globally. However there might be distinctive native options and native firms that we’ll discover on this house.
GamesBeat: You talked about a couple of investments already. Is there a fund that’s principally related to this? Has a few of that began to get deployed already? Or are you coming in contemporary, not having performed an funding but?
Tandon: As a platform Bitkraft has already invested in India by way of its numerous funds. There are three to 4 firms that we have already got, and which can be doing very nicely. Going ahead, there are going to be a couple of extra firms. The precise technique that may play out continues to be a piece in progress. The entire level of hiring an area accomplice is to give attention to that space extra, and in different rising markets as nicely, just like the Center East.
GamesBeat: Does Bitkraft have extra native companions around the globe, or are you one of many first?
Tandon: We now have a really numerous crew geographically. We’re situated in all places. We now have a principal in Singapore that space. We beforehand had a accomplice in Korea. However at a accomplice stage that is the primary, so far as I do know, the primary strategic give attention to a market like this that deserves particular consideration. That is the primary time we’re localizing in India.
GamesBeat: Do you see different game-focused enterprise capital funds doing this, discovering companions in India or in any other case investing in Indian sport firms?
Tandon: There are different giant gaming funds that even have loads of Indian offers. However most of their sourcing community is thru native VCs, which wouldn’t have thesis-based gaming-focused investing. There’s curiosity, however there’s no consistency or give attention to this particular space. For my part, this can be a huge validation for the market. It reveals there’s loads of potential, that a big fund like Bitkraft has a devoted technique for rising markets and India.
GamesBeat: I lately spoke to Dino Ying from VSPO and Hero Esports. He talked about investing in esports in China a very long time in the past, and the way lengthy a street that’s been. They finally discovered recognition from the Saudis. The Saudis made an enormous funding. That made it way more international as an effort. He talked about how he needed to be affected person for a few years, enduring loads of losses earlier than it will definitely turned a greater enterprise. Is that one thing that you just foresee Indian firms nonetheless having to take care of, particularly within the esports class? Is there an extended street to sit up for nonetheless?
Tandon: Particularly for esports–one in every of my first investments at Krafton was Nodwin Gaming. In addition they acquired funding from Sony and Nazara. That’s one firm that’s worthwhile in esports in India. It’s tripled in valuation during the last three years. It’s scaling very quick. Sure, you must be affected person in sure genres and subgenres or sectors. Persistence issues. However the strategic alternative of this market, by way of an investor lens, could be very excessive. There are firms which can be going to go public, and so they’ll purchase startups for diversification for no matter motive. There’s loads of strategic curiosity out there to broaden. From a fund perspective that’s an ideal place to be. Even when there’s money stream or profitability points in sure sectors, they’re good acquisition targets. We’ve seen that with VSPO.
GamesBeat: Do you have got some other feedback on specific sorts of firms which can be engaging, or areas inside India the place you would possibly focus?
Tandon: India is a big nation by way of space, however the principle facilities of entrepreneurship for a lot of the tech startups are in three to 4 areas: Bangalore, the Mumbai cluster that features Pune, New Delhi, and to some extent Hyderabad and the remainder of the smaller cities. These are the place a lot of the startups are geographically. However loads of Indian founders are already aspirational so far as reaching out to international traders. The data that worldwide traders deliver to founders has helped with their worldwide enlargement. The profile is manner higher than what an area enterprise capital fund would have. That’s my considering. That’s how we’ll have the ability to get loads of good high quality entrepreneurs to work with us.
GamesBeat: Have you ever recognized Jens Hilgers since earlier than coming to Bitkraft?
Tandon: In fact. We’ve interacted for 3 or 4 years. We’ve at all times saved in contact concerning the Indian market. I’ve been in contact with most international traders, as a result of each time they should perceive the market in India or the Center East–there are only a few individuals who have really performed investments in these areas and efficiently acquired studios. There’s loads of curiosity in an individual like that in these areas for knowledge-gathering and so forth. Jens has been very curious concerning the market. The time to do it’s in all probability now. Two or three years in the past, it wasn’t a really engaging early stage funding market.
GamesBeat: How steady has the job market been in India? Within the U.S. and the west usually, the final 30 months have seen fixed layoffs. One consequence is that there was no scarcity of expertise out there to go to startups. Quite a lot of startups have been shaped by groups that had been let go. Has that occurred in India as nicely? Is there one other supply of expertise that you just discover there?
Tandon: I gave a chat on the Bitkraft Summit the place I began by saying that each time I come to the U.S. for an occasion in gaming, the information isn’t very constructive. I’m residing in an oasis of open optimism. Our markets have been in a progress section. We’ve seen in all probability the best startup funding in gaming occurring within the final yr or two. In fact there are provide chain points with AI and so forth, that are correcting on the general business stage. However India and the Center East are the 2 greatest progress markets for cellular gaming and gaming general. There’s loads of hiring exercise. There’s loads of funding exercise, new startup exercise. The ARPPUs are rising. It’s completely different from the opposite markets. That’s why we’re hopeful that this can stick with it.
The general sentiment is optimistic as nicely. India is the fastest-growing economic system on the earth at this level. Quite a lot of elements are contributing. The macro tailwinds are very robust.
GamesBeat: Have Indian sport firms picked up loads of expertise from the tech sector usually?
Tandon: If you concentrate on the businesses the place folks get their expertise, there are loads of facilities in India. Zynga has a fairly large crew in India. To provide an instance, Zynga alumni have generated greater than $600-700 million in enterprise worth, simply in new gaming startups they’ve created within the final 5 to 6 years. These are money exits. PlaySimple, Moonfrog, these two firms had been acquired by MTG and Stillfront. There are various others, in different sectors as nicely, the place Zynga alumni have had an impression. Only one firm has made that impression. Then you have got EA. They’ve a crew the place folks have branched off into startups. Ubisoft has round 1,200 to 1,400 folks in India. Scopely now has lots of people.
There are loads of offshore facilities that had been created the place folks have leveled up within the worth chain and began working their very own video games. Quite a lot of Indian startups in gaming which can be getting funding have additionally began to rent western expertise. As you stated, the job scene within the western markets isn’t nice. I’ve seen loads of good high quality western expertise coming into India and constructing studios with their expertise. Certainly one of them is a portfolio firm of ours, LILA Video games. Joseph Kim moved to arrange a studio in Bangalore. That’s a world founder organising a crew in Bangalore to construct video games.
