Nazara Technologies, a Mumbai-based mobile gaming company, is expected to raise $50 million within a few months through the private equity route.
According to information available with VCCircle, Nazara is expected to be wooed by a clutch of private equity investors given its strength as a profitable venture. In this round, the firm's valuation is expected to be 7-8 times its annual revenue run rate of Rs 300 crore. Investment bankers indicate that Nazara may have a bottom-line of Rs 62 crore.
A dominant player in the mobile gaming space in India, Nazara was founded in 2000 during the technology bust. But the firm gained traction when it changed course in 2003 to make games for mobile phones. It then raised around $3 million from WestBridge Capital between 2006 and 2007. Nazara focuses on expanding its business in India and Africa.
When asked about the development, Nazara founder and CEO of Nitish Mittersain said discussions are going on and that he wouldn't be able to comment on the fundraise at this point in time.
"Nazara is the dominant player in mobile gaming and is growing both its top- and bottom-line. All I can say is that we are happy shareholders," WestBridge Capital MD Sandeep Singhal, told VCCircle.
With rising smartphone and tablet penetration, the mobile gaming industry in India is expected to touch Rs 2,620 crore by 2019, with a year-on-year growth of 20 per cent, according to a recent report by FICCI-KPMG. The mobile gaming market in the country grew from Rs 820 crore in 2013 to Rs 1,070 crore in 2014.
"New and creative games appealing to various age groups and catering to a range of interests are developed. This is likely to change the user demographics with younger gamers and more females getting on board along with a new category—mom gamers," the report said. "Though mobile gaming is growing faster than any other gaming category, developers are still figuring out means to monetise this platform," it added.
Globally, 44 per cent of smartphones and tablets are used for gaming and by 2018 the count of mobile game users is expected to reach one billion.
Even as Nazara was preparing to raise funds, it had floated a Rs10 crore seed fund to back ventures in the gaming space in mid-2014. Following this, it led a Rs 4.2 crore investment in Bangalore-based social gaming startup HashCube Technologies with participation from existing investors Indian Angel Network and Blume Ventures, besides ah! Ventures and CDMA Development Group founder Perry LaForge.
The company has signed a deal with CSE in February this year to create, distribute and market games around cricketer Virat Kohli for three years. Nazara had signed several celebrities previously, including Sachin Tendulkar, Amitabh Bachchan and Salman Khan to develop games around them. The company also had entered into a multi-movie deal with Fox Star Studios to create games on movies the studio is associated with.
(Edited by Joby Puthuparampil Johnson)