Aspirations of building an esports-focused sports media company were a driving force in Nodwin Gaming’s latest fundraiser. The Indian gaming and esports media company, a material subsidiary of BSE-listed Nazara Technologies Limited, entered a binding agreement to raise $28M USD. Investors in the funding round include existing investors Nazara, Krafton Inc. (who announced Friday that its most popular game in the region—Battlegrounds Mobile India had finally been unbanned by the government), Jetsynthesys Private Limited, and Good Game Investment Trust; and new investors Sony Group Corporation and Innopark (India) Private Limited. The transaction values Nodwin Gaming at $349M post-money.
In a conversation with The Esports Advocate and AFK Gaming on Thursday, Nodwin Gaming co-founder and managing director Akshat Rathee talked about the company’s expansion plans, the value of emerging markets, and the economic situation of esports.
Nodwin Gaming plans to utilize a majority of the investment proceeds to grow its gaming and esports ecosystem. Regarding the timing of the investment, Rathee mentioned that the company’s investors are strategic investors that are also “patient investors” and went on to tell us, “I am so glad I’m an esports company right now. I am so glad that I am based out of India right now. I am so glad I have investors who understand what I’m doing, and they appreciate me for what we have done and built,” said Rathee.
The ban of several high-profile mobile esports games in India over the last few years such as PUBG Mobile, Free Fire, and Battlegrounds Mobile India was often interpreted as a blow to the esports scene in the country. Rathee however, thinks of those obstacles as opportunities since Nodwin Gaming was able to grow almost 70% year-after-year despite those bans by creating the narrative of what could have been if those bans didn’t happen. In its latest fiscal period (2022-23), Nodwin generated a turnover of $46.1M, compared to $25.5M in 2021-22 and $16.4M in 2020-21—achieving a 68% compound annual growth rate, while maintaining profitability.
“The power of the ecosystem of India is being the most populous country and the youngest country in the world,” he continued. “We are looking at a golden decade [with an influx of young people entering] the job market over the next 10 years [and changing consumer habits].” According to the most recent census in India, the age group of 12 to 26-year-olds consists of approximately 314M young people. “And that’s why the world is bullish on India.”
Alongside growing the business in its domestic market, Nodwin Gaming is looking to increase its emerging market footprint. “We are an emerging market phenomenon, which is not just a fashionable statement. To us, it is the definition of who we are,” explained Rathee. He elaborated that Nodwin’s core competence in gaming and esports suits the emerging market demographics perfectly. In contrast to markets with aging populations including Western Europe and North America, the youth usually dominates the demographic distribution of emerging markets such as India, Africa, and the Middle East. Consequently, Nodwin Gaming is focused on investing in and using the proceeds of its latest investment round to expand into those markets.
Nodwin Gaming’s strategy for entering into new markets is testing a range of products and services from its portfolio to find out what works in a given market according to Rathee. Considering that the company has implemented a multi-faceted approach to doing business over the last few years, Nodwin is able to seize new business opportunities in new markets through a variety of divisions, including its Esports IP division, Influencer division, Music Festival division, Merchandising division, White Label Agency division, and Scripted Content division.
The collaboration of all those business divisions with each other and partners such as publishers and foreign tournament organizers is the key ingredient for transforming Nodwin Gaming into an esports-focused sports media company that develops versatile and consumer-focused IPs as Rathee targets to make esports the second most popular sport in any given market. In addition to driving expansion through the company’s existing assets, Nodwin Gaming is also exploring strategic acquisitions that drive value to its network.
“One of the companies I’ve had a lot of inspiration from is Liberty Media and their takeover of Formula One,” shared Rathee. The aspect of acquiring such an established IP and exploring new opportunities with it such as the Drive to Survive Netflix show that brought in a wave of new fans to the sport appealed to him. Therefore, Rathee anticipates and invests in esports IPs transcending the limits of just being pure esports in a similar fashion to how Formula One became more than just a sport.
Addressing the current fundraising struggles of esports organizations and tournament organizers Rathee said, “that’s a Western phenomenon. The West has unfortunately defined the esports business model as a business model of loss. In regards to the esports industry in general, Rathee added that ”the time for free money in gaming and esports is over. We are sitting in a consolidation phase in our industry. The industry will be smaller but stronger because of this.”