WestBridge exits IPO-bound Rakesh Jhunjhunwala-backed gaming startup Nazara in secondary transaction

UK-based financial advisor Plutus Wealth Management LLP and its associates have bought shares worth Rs 500 crore in Rakesh Jhunjhunwala-backed mobile gaming startup Nazara Technologies. The shares have been purchased from Nazara’s early investor WestBridge Ventures’ private equity fund WestBridge Ventures II Investment Holdings in a secondary transaction to provide latter the complete exit from the gaming company that had developed popular games such as World Cricket Championship, Chhota Bheem Race, Motu Patlu Race, etc. WestBridge Ventures had put around Rs 22.6 crore in Nazara and obtained sales consideration of around Rs 1000 crore from its investment.

“We believe gaming will be a prominent form of entertainment and will do well in the next decade. We believe that Nazara is well-placed to leverage on the vast available opportunity,” said Arpit Khandelwal, Partner, Plutus Wealth Managing in a statement. With the latest deal, Nitish Mittersain who heads Nazara Technologies said the company is seeing Plutus as a ‘long term investor’ in the company. The secondary exit has come ahead of the company’s planned IPO this year.

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Apart from Jhunhunwala, who had put Rs 182 crore in 2017, Nazara had raised funding from IIFL Asset Management, Sequoia Capital, and others in the past. Nazara had also invested more than Rs 300 crore in gaming and related startups in the past five years. The company had made investments and acquisitions in multiple gaming verticals such as esports, edutainment, infotainment, fantasy sports, multiplayer games like carrom and mobile cricket games, etc to build a network in the interactive gaming and sports segment in India and expanded to other geographies including Latin America, Southeast Asia, Africa, etc.

India’s gaming sector had a market value of around Rs 6,200 crore in 2019 and was likely to grow to more than Rs 25,000 crore by 2024 while the number of people employed in the sector is expected to be more than 40,000, according to Statista. On the other hand, mobile gaming’s market value was expected to hit around Rs 2965.4 crore market by 2022 while the number of mobile phone gamers in India was anticipated to be approximately 62.8 crores by 2020.