Gaming and interactive media enterprise capital agency Lumikai is aiming to shut 10-12 investments in pre-seed and Collection A companies over the following few years from its $50-million India fund II, in response to its founding basic accomplice, Salone Sehgal.
The VC agency has $58 million in belongings beneath administration from 15 portfolio firms, which have collectively raised greater than $120 million, Sehgal advised ET. “Despite the fact that we’re a seed-stage investor, greater than 70% of our portfolio firms are income producing.”
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Lumikai’s first fund, launched in 2020, allotted $40 million in gaming startups, together with Loco, Elo Elo and Bombay Play. Extra not too long ago, it led funding rounds in Vobble, Autovrse and QuriousBit as a part of Fund II, which was introduced final yr.
The VC agency is especially bullish on interactive media sub-sectors resembling content material (recreation improvement), platforms (interactive audio, social leisure gaming), instruments and know-how infrastructure (in combined actuality and spatial computing) in addition to methods of play (in ed-tech, health-tech, fintech), in response to Sehgal.
“Media and leisure India is a few $25 billion income pie, of which $12 billion is new media, together with interactive, audio/video, video games, esports, animation, VFX, and many others,” Sehgal mentioned. “And that income pie is predicted to develop to about $30 billion.”
There’s curiosity in India’s recreation developer expertise as abundance of capital has began flowing into the gaming business from newer corners, such because the SBI Mutual Fund, Kamath brothers, Japanese leisure agency MIXI Inc., Sony Interactive Leisure, in addition to Kratos Studios.
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“The most important ache level was danger capital for builders. Now, when capital unlocked within the final 2-Three years, this established expertise which had been sitting exterior India is shifting again,” Sehgal mentioned, including that there have been near 2,000 offers within the recreation improvement studios, in contrast with solely 25 4 years in the past.Additionally learn | Nazara Applied sciences units apart $100 million for acquisitions
She mentioned there’s been early adoption of generative synthetic intelligence instruments in recreation improvement in areas resembling idea artwork, advertising and marketing collaterals, testing, debugging, change detection in multiplayer video games, knowledge mining, actual time analytics in addition to picture enhancements.
On actual cash gaming, Sehgal mentioned it is just a $2 billion sub-sector amongst new media which has already peaked in India and wouldn’t be a “blue-ocean alternative” for an early-stage VC agency like Lumikai.
“We search alternatives for creating class management over the following 5-10 years. This (RMG) is an area that mushroomed in 2015, hit its peak in 2018-19 when there have been very massive, nicely established incumbent gamers,” Sehgal mentioned. “So would that be a blue-ocean or a red-ocean?”
Lumikai has already minimize its progress forecast for the RMG phase to five% over subsequent 5 years, down from 25% beforehand, with its share within the general market decreasing to 32% by the 2028 fiscal.