Anuj Tandon has joined Bitkraft Ventures, a seed-stage investor for interactive media and video games, as companion targeted on the fast-growing Indian recreation market.
Tandon brings almost 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 companion can do loads of offers to kick off investments and construct a recreation ecosystem.
India’s on-line gaming market is without doubt one of the quickest rising on the planet as per the most recent report from PwC, projecting to develop at 14.5% between 2023 and 2028, almost 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 corporations, with a selected deal with 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 contains 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 improvement powerhouse for fairly a while already with a deep pool of technical expertise. The Inventive and Leisure trade has been selecting up visibly over the past 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 corporations. With Tandon’s experience, Bitkraft believes they are going to be geared up to assist the nation’s progressive corporations and supply the assets they should obtain their objectives on a world scale.
“We have made several investments in India already, but our ambition is to increase our activity and capital deployment in the country visibly going forward. This is where Anuj’s experience and network in the Indian games and entertainment industry is crucial to us and our ability to identify and partner with the most outstanding entrepreneurs in India,” mentioned Bitkraft founding normal companion, Jens Hilgers, in an announcement. “It is more than just having a person on the ground; it is the deep understanding of the market, the actors, the local preferences and dynamics from people 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 akin to FRND, Nautilus Cellular, Nodwin, KukuFM and extra, in lower than two years. Bitkraft has greater than 130 portfolio corporations and it has $1.05 billion beneath 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 variation for you?
Anuj Tandon: I’ve been within the recreation 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 ultimately acquired by Dream11, which is a fantasy gaming big in India. Then I labored for Nazara for a 12 months, constructing a recreation 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 corporations 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 unique function, 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 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 wish to construct recreation corporations. 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 is 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 occurring. There’s political stability. There’s an enormous IPO marketplace for tech startups. India was one of many highest IPO markets final 12 months. Greater than 25 tech startups are planning to IPO subsequent 12 months. 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 corporations 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 every single place. I’ve been an entrepreneur myself. I raised funds in 2012 for gaming in India. The most important 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” could be the flawed 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 individuals 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 necessary. 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 corporations from Indian gaming corporations.
GamesBeat: How did you get in contact with Bitkraft? Had they been taking a look at the marketplace for a while? What had been the circumstances that led them to get ?
Tandon: In my Krafton function, I had the gaming platform to take a position out there, construct a technique, a thesis, all of that. The portfolio was fairly superior. Kind of a self-plug there. Nevertheless it’s a really first rate portfolio. That platform gave me a chance to community with lots of people as nicely. Bitkraft already has 4 portfolio corporations with out even having a devoted technique thus far. That’s why they acquired in contact with me. I met Jens this 12 months at GDC. We began having discussions about technique. It’s been a decently lengthy technique 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 traders in gaming and interactive media in India. Only a few individuals have that native information.
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. You recognize 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 recreation trade. However that gave me a entrance row view of how client gaming startups and gaming and interactive media scaled in China. What was the playbook? How did they do publishing? How did they do recreation improvement? 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 case you wished, as a client startup, to develop in India, it was all about DAU and MAU. However now you’re lastly beginning to see individuals discuss paying customers, about common income per consumer. These are actually making important numbers. When you might have 450 million smartphone avid gamers within the nation, even in case you solely have 1-2% conversion, that may be a fairly huge quantity. Even when the ARPPU is barely decrease, you may generate a good enterprise.
We’re following the identical footsteps, however I feel the ecosystem will likely be barely completely different than China. Our consumer base is extra westernized, at the very least on the prime. 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 corporations 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 nations that can eat Indian content material and gaming.
India to India, already we’re seeing some indicators. In case 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 enjoying. That’s the primary signal that Indians are extra keen on enjoying extra native content material than international. In fact, the funds and class of recreation improvement remains to be reaching. I’m bullish on each. I feel as a direct tactical alternative, India to international will likely 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 is going to 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 content material. You’ve interactive media. Utilized recreation mechanics, infrastructure instruments, and know-how for gaming. We’re not transferring from our 4 core pillars of investments we do. It will likely be much like what we already do globally. However there will likely be distinctive native options and native corporations that we’ll discover on this area.
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 recent, not having performed an funding but?
Tandon: As a platform Bitkraft has already invested in India by means of its varied funds. There are three to 4 corporations that we have already got, and which might be doing very nicely. Going ahead, there are going to be just a few extra corporations. The precise technique that can play out remains to be a piece in progress. The entire level of hiring an area companion is to deal with that space extra, and in different rising markets as nicely, 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 crew geographically. We’re situated in every single place. We have now a principal in Singapore taking a look at 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 deal with 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 recreation corporations?
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 do not need thesis-based gaming-focused investing. There’s curiosity, however there’s no consistency or deal with this particular space. In my view, it is a huge validation for the market. It exhibits 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 ultimately 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 grew to become a greater enterprise. Is that one thing that you simply foresee Indian corporations nonetheless having to cope with, particularly within the esports class? Is there a protracted street to look ahead to nonetheless?
Tandon: Particularly for esports–considered one of my first investments at Krafton was Nodwin Gaming. Additionally they obtained funding from Sony and Nazara. That’s one firm that’s worthwhile in esports in India. It’s tripled in valuation over the past three years. It’s scaling very quick. Sure, you must be affected person in sure genres and subgenres or sectors. Endurance issues. However the strategic alternative of this market, by means of an investor lens, could be very excessive. There are corporations which might be going to go public, and so they’ll purchase startups for diversification for no matter cause. There’s loads of strategic curiosity out there to increase. From a fund perspective that’s an excellent place to be. Even when there’s money circulation or profitability points in sure sectors, they’re good acquisition targets. We’ve seen that with VSPO.
GamesBeat: Do you might have another feedback on specific sorts of corporations which might be enticing, or areas inside India the place you would possibly focus?
Tandon: India is a large nation by way of space, however the principle 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 loads of Indian founders are already aspirational so far as reaching out to international traders. The information that worldwide traders deliver to founders has helped with their worldwide enlargement. The profile is means higher than what an area enterprise capital fund would have. That’s my considering. That’s how we’ll be capable to get loads of good high quality entrepreneurs to work with us.
GamesBeat: Have you ever identified Jens Hilgers since earlier than coming to Bitkraft?
Tandon: In fact. We’ve interacted for 3 or 4 years. We’ve at all times stored in contact concerning the Indian market. I’ve been in contact with most international traders, as a result of every 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 enticing early stage funding market.
GamesBeat: How secure 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 accessible to go to startups. Lots 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 simply discover there?
Tandon: I gave a chat on the Bitkraft Summit the place I began by saying that every time 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 section. We’ve seen in all probability the very best startup funding in gaming occurring within the final 12 months 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 greatest progress markets for cell 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 keep on.
The general sentiment is optimistic as nicely. India is the fastest-growing financial system on the planet at this level. Lots of components are contributing. The macro tailwinds are very robust.
GamesBeat: Have Indian recreation corporations picked up loads of expertise from the tech sector usually?
Tandon: If you consider the businesses the place individuals get their expertise, there are loads of facilities in India. Zynga has a fairly huge crew in India. To offer 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 corporations had been acquired by MTG and Stillfront. There are lots of others, in different sectors as nicely, the place Zynga alumni have had an affect. Only one firm has made that affect. Then you might have EA. They’ve a crew the place individuals have branched off into startups. Ubisoft has round 1,200 to 1,400 individuals in India. Scopely now has lots of people.
There are loads of offshore facilities that had been created the place individuals have leveled up within the worth chain and began working their very own video games. Lots of Indian startups in gaming which might be getting funding have additionally began to rent western expertise. As you mentioned, 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.
