Anuj Tandon has joined Bitkraft Ventures, a seed-stage investor for interactive media and video games, as associate centered on the fast-growing Indian recreation market.
Tandon brings practically 15 years of expertise as a gaming entrepreneur, government, and investor in India to Bitkraft’s staff, establishing the enterprise capital agency’s footprint within the area. That may be a giant deal, as a single associate can do plenty of offers to kick off investments and construct a recreation ecosystem.
India’s on-line gaming market is likely one of the quickest rising on this 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 offers Bitkraft a strategic opening into this quickly increasing market.
As a Bitkraft associate, Tandon will search to put money into modern Indian gaming and interactive media firms, 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 belongings.
India has been a software program improvement powerhouse for fairly a while already with a deep pool of technical expertise. The Artistic 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 technology 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 assist the nation’s modern firms and supply the assets they should obtain their objectives on a world scale.
“We’ve 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 capability to establish and associate with probably the most excellent entrepreneurs in India,” mentioned Bitkraft founding common associate, 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 individuals 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 firms and it has $1.05 billion below 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 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 large in India. Then I labored for Nazara for a yr, 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 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 associate 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 attention-grabbing 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 technology 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 finished some exits. They’ve some liquidity. They need to construct recreation firms. It’s an attention-grabbing 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 totally different predictions. PWC is predicting it’ll go from three to eight. There’s an optimism in regards to 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 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 plenty of liquidity occurring 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 apart from 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 a scarcity of a peer community that’s extra international, a scarcity of a mentor community that’s extra international. India is a really immature gaming ecosystem. “Immature” is likely to be the improper 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 need to do new issues and construct new issues, having a peer community that’s extra international, a powerful 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 need to construct international gaming firms from Indian gaming firms.
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 position, I had the gaming platform to take a position available in the market, construct a method, a thesis, all of that. The portfolio was fairly superior. Form of a self-plug there. However 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 firms with out even having a devoted technique to date. That’s why they received in contact with me. I met Jens this yr at GDC. We began having discussions about technique. It’s been a decently lengthy technique of understanding them. They’ve been monitoring the market, monitoring the individuals who’ve been available in the market. 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 shifting 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 a giant 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 stay 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 client startup, to develop in India, it was all about DAU and MAU. However now you’re lastly beginning to see individuals speak about paying customers, about common income per consumer. These at the moment are making vital numbers. When you’ve gotten 450 million smartphone players within the nation, even should you solely have 1-2% conversion, that may be a fairly large 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 might be barely totally 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 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 plenty of nations that can devour Indian content material and gaming.
India to India, already we’re seeing some indicators. In the event 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 taking part in. That’s the primary signal that Indians are extra fascinated with taking part in 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 right away tactical alternative, India to international might be a greater alternative. However definitely India to India makes a lot sense. There’s plenty 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’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 observe our core thesis. You’ve content material. You’ve interactive media. Utilized recreation mechanics, infrastructure instruments, and know-how for gaming. We’re not shifting from our 4 core pillars of investments we do. It will likely 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 finished an funding but?
Tandon: As a platform Bitkraft has already invested in India by its varied funds. There are three to 4 firms that we have already got, and which might be doing very nicely. Going ahead, there are going to be a couple of extra firms. The precise technique that can play out remains to be a piece in progress. The entire level of hiring a neighborhood associate 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 around the globe, or are you one of many first?
Tandon: We’ve a really numerous staff geographically. We’re situated in every single place. We’ve a principal in Singapore taking a look at that space. We beforehand had a associate in Korea. However at a associate 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 firms?
Tandon: There are different giant gaming funds that even have plenty 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 deal with this particular space. For my part, it is a huge validation for the market. It reveals there’s plenty 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 highway that’s been. They ultimately discovered recognition from the Saudis. The Saudis made a giant funding. That made it far more international as an effort. He talked about how he needed to be affected person for a few years, enduring plenty of losses earlier than it will definitely grew to become a greater enterprise. Is that one thing that you just foresee Indian firms nonetheless having to cope with, particularly within the esports class? Is there an extended highway to sit up for nonetheless?
Tandon: Particularly for esports–one among 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 over the past three years. It’s scaling very quick. Sure, it’s important to be affected person in sure genres and subgenres or sectors. Persistence issues. However the strategic alternative of this market, by an investor lens, could be very excessive. There are firms which might be going to go public, they usually’ll purchase startups for diversification for no matter motive. There’s plenty of strategic curiosity available in the market to develop. From a fund perspective that’s a terrific 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’ve gotten another feedback on explicit sorts of firms 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 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 plenty of Indian founders are already aspirational so far as reaching out to international traders. The information that worldwide traders carry to founders has helped with their worldwide growth. The profile is means higher than what a neighborhood enterprise capital fund would have. That’s my pondering. That’s how we’ll have the ability to get plenty 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 in regards to 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 truly finished investments in these areas and efficiently acquired studios. There’s plenty of curiosity in an individual like that in these areas for knowledge-gathering and so forth. Jens has been very curious in regards to 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 usually, the final 30 months have seen fixed layoffs. One consequence is that there was no scarcity of expertise obtainable 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 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 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 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 trade degree. However India and the Center East are the 2 largest progress markets for cell gaming and gaming general. There’s plenty of hiring exercise. There’s plenty 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 this can keep on.
The general sentiment is optimistic as nicely. India is the fastest-growing financial system on this planet at this level. Lots of elements are contributing. The macro tailwinds are very sturdy.
GamesBeat: Have Indian recreation firms picked up plenty of expertise from the tech sector usually?
Tandon: If you consider the businesses the place individuals get their expertise, there are plenty of facilities in India. Zynga has a fairly large staff 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 firms had been acquired by MTG and Stillfront. There are a lot of others, in different sectors as nicely, the place Zynga alumni have had an influence. Only one firm has made that influence. Then you’ve gotten EA. They’ve a staff 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 plenty 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 plenty of good high quality western expertise coming into India and constructing studios with their expertise. One in all them is a portfolio firm of ours, LILA Video games. Joseph Kim moved to arrange a studio in Bangalore. That’s a world founder establishing a staff in Bangalore to construct video games.
