Anuj Tandon has joined Bitkraft Ventures, a seed-stage investor for interactive media and video games, as companion targeted 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 workforce, establishing the enterprise capital agency’s footprint within the area. That may be a giant deal, as a single companion can do lots of offers to kick off investments and construct a sport ecosystem.
India’s on-line gaming market is among the quickest rising on the planet 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 companion, Tandon will search to put money into progressive Indian gaming and interactive media firms, with a selected concentrate on 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 property.
India has been a software program growth powerhouse for fairly a while already with a deep pool of technical expertise. The Inventive and Leisure trade has been selecting up visibly during the last decade and the Indian gaming trade 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 progressive firms and supply the assets they should obtain their targets on a world scale.
“We have now 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 trade is essential to us and our potential to establish and companion with probably the most excellent entrepreneurs in India,” stated Bitkraft founding normal companion, Jens Hilgers, in a press release. “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 reminiscent of FRND, Nautilus Cell, 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 not too long ago.
Right here’s an edited transcript of our interview.
GamesBeat: What led to this alteration for you?
Anuj Tandon: I’ve been within the sport trade 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 reasonably respectable 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 distinct 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 companion for various gaming efforts at an Indian firm, JetSynthesys.
That’s the background. Operator, investor, and entrepreneur. Bitkraft occurred as a result of I actually really feel we’re on the proper time in India. I’ve seen the journey of the Indian gaming market from inside and out of doors the trenches. It’s a really fascinating market. Now it’s beginning to present some indicators of monetization, of mass consumer penetration yielding precise sturdy revenues for sure video games. The second era of gaming entrepreneurs is coming in. It’s a nascent market nonetheless. It’s immature when it comes to gaming expertise. However we’re seeing individuals who have accomplished some exits. They’ve some liquidity. They wish to construct sport firms. It’s an fascinating time to enter the market.
GamesBeat: I wrote not too long ago about Lumikai’s report. They have 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 totally different predictions. PWC is predicting it’s going to 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 taking place. There’s political stability. There’s a large 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 lots of liquidity taking place within the startup ecosystem, which has been constructing for the final 15 years. You’re beginning to see the flywheel shifting – 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 in addition to 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 every single place. 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” may be the flawed phrase. It’s very younger. Individuals solely began taking part in 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 japanese markets which have already made and realized from.
When your entrepreneurs wish to do new issues and construct new issues, having a peer community that’s extra international, a robust mentor community, that’s essential. That’s why I feel a world fund makes a lot extra of a distinction within the lives of those second-generation founders that wish 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 have been the circumstances that led them to get ?
Tandon: In my Krafton position, I had the gaming platform to speculate out there, construct a technique, a thesis, all of that. The portfolio was fairly superior. Form of a self-plug there. But it surely’s a really respectable portfolio. That platform gave me a possibility to community with lots of people as effectively. Bitkraft already has 4 portfolio firms with out even having a devoted technique up to now. 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 means of figuring out 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 buyers in gaming and interactive media in India. Only a few folks have that native information.
GamesBeat: Was there an expectation you had, that this was shifting in parallel to one thing like China 10 or 15 years in the past?
Tandon: I labored in a Chinese language firm very carefully with the founders there at Yoozoo. You realize Lin Qi, God relaxation his soul. He was the founding father of Yoozoo. He died in 2020, sadly. It was a giant scandal within the Chinese language sport trade. 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 dwell streaming and esports?
My view is, sure, we’re lastly beginning to see the essential constructing blocks fall into place. For six to eight years it was all about customers. In the event you needed, as a shopper startup, to develop in India, it was all about DAU and MAU. However now you’re lastly beginning to see folks speak about paying customers, about common income per consumer. These at the moment are making important numbers. When you’ve got 450 million smartphone avid gamers within the nation, even in the event you solely have 1-2% conversion, that may be a reasonably huge quantity. Even when the ARPPU is barely decrease, you’ll be able to generate a good enterprise.
We’re following the identical footsteps, however I feel the ecosystem will probably be barely totally 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 when it comes to 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 a large Indian diaspora in lots of nations that may eat Indian content material and gaming.
India to India, already we’re seeing some indicators. In the event you take a look at the highest MAU and DAU video games, they’re native board video games, native card video games that persons are taking part in. That’s the primary signal that Indians are extra all in favour of taking part in 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 a direct tactical alternative, India to international will probably be a greater alternative. However definitely India to India makes a lot sense. There’s lots 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 absolutely, although, Indian content material began to dominate. That’s occurred with different media and leisure, and I feel it’s going to occur with gaming as effectively.
GamesBeat: What classes do you want to concentrate to so far as the potential for Bitkraft investments?
Tandon: We’ll nonetheless observe our core thesis. You’ve got content material. You’ve got interactive media. Utilized sport mechanics, infrastructure instruments, and expertise for gaming. We’re not shifting from our 4 core pillars of investments we do. It is going to be much like what we already do globally. However there will probably be distinctive native options and native firms that we’ll discover on this house.
GamesBeat: You talked about just a few 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 accomplished 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 might be doing very effectively. Going ahead, there are going to be just a few extra firms. The precise technique that may play out continues to be a piece in progress. The entire level of hiring an area companion is to concentrate on that space extra, and in different rising markets as effectively, just like the Center East.
GamesBeat: Does Bitkraft have extra native companions all over the world, or are you one of many first?
Tandon: We have now a really numerous workforce geographically. We’re situated in every single place. We have now a principal in Singapore that space. We beforehand had a companion in Korea. However at a companion degree that is the primary, so far as I do know, the primary strategic concentrate on 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 massive gaming funds that even have lots of Indian offers. However most of their sourcing community is thru native VCs, which would not have thesis-based gaming-focused investing. There’s curiosity, however there’s no consistency or concentrate on this particular space. For my part, it is a large validation for the market. It reveals there’s lots of potential, that a big fund like Bitkraft has a devoted technique for rising markets and India.
GamesBeat: I not too long ago 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 highway that’s been. They finally discovered recognition from the Saudis. The Saudis made a giant 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 lots of losses earlier than it will definitely grew to become a greater enterprise. Is that one thing that you simply foresee Indian firms nonetheless having to take care of, particularly within the esports class? Is there an extended highway to stay up for nonetheless?
Tandon: Particularly for esports–one in all my first investments at Krafton was Nodwin Gaming. In addition they obtained 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 might be going to go public, and so they’ll purchase startups for diversification for no matter motive. There’s lots of strategic curiosity out there to increase. From a fund perspective that’s an incredible 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’ve got some other feedback on specific sorts of firms which might be enticing, or areas inside India the place you may focus?
Tandon: India is a big nation when it comes to space, however the primary facilities of entrepreneurship for many 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 many of the startups are geographically. However lots of Indian founders are already aspirational so far as reaching out to international buyers. The information that worldwide buyers convey to founders has helped with their worldwide enlargement. The profile is approach higher than what an area enterprise capital fund would have. That’s my considering. That’s how we’ll be capable of get lots 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 all the time saved in contact concerning the Indian market. I’ve been in contact with most international buyers, as a result of at any time when they should perceive the market in India or the Center East–there are only a few individuals who have really accomplished investments in these areas and efficiently acquired studios. There’s lots 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 most likely now. Two or three years in the past, it wasn’t a really enticing early stage funding market.
GamesBeat: How steady has the job market been in India? Within the U.S. and the west generally, the final 30 months have seen fixed layoffs. One consequence is that there was no scarcity of expertise out there to go to startups. A number of startups have been fashioned by groups that have been let go. Has that occurred in India as effectively? Is there one other supply of expertise that you simply discover there?
Tandon: I gave a chat on the Bitkraft Summit the place I began by saying that at any time when I come to the U.S. for an occasion in gaming, the information isn’t very constructive. I’m dwelling in an oasis of open optimism. Our markets have been in a progress part. We’ve seen most likely the very best startup funding in gaming taking place within the final yr or two. In fact there are provide chain points with AI and so forth, that are correcting on the general trade degree. However India and the Center East are the 2 largest progress markets for cellular gaming and gaming total. There’s lots of hiring exercise. There’s lots of funding exercise, new startup exercise. The ARPPUs are rising. It’s totally different from the opposite markets. That’s why we’re hopeful that it will keep on.
The general sentiment is optimistic as effectively. India is the fastest-growing financial system on the planet at this level. A number of elements are contributing. The macro tailwinds are very sturdy.
GamesBeat: Have Indian sport firms picked up lots of expertise from the tech sector generally?
Tandon: If you concentrate on the businesses the place folks get their expertise, there are lots of facilities in India. Zynga has a reasonably huge workforce in India. To present 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 have been acquired by MTG and Stillfront. There are a lot of others, in different sectors as effectively, the place Zynga alumni have had an affect. Only one firm has made that affect. Then you’ve got EA. They’ve a workforce 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 lots of offshore facilities that have been created the place folks have leveled up within the worth chain and began operating their very own video games. A number of Indian startups in gaming which might 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 lots of good high quality western expertise coming into India and constructing studios with their expertise. One among 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 workforce in Bangalore to construct video games.
