Pvt equity firms line up cash for Nazara

Two entities, including Sequoia, to participate in second round of funding

MUMBAI: The domestic gaming industry seems to have come on the private equity radar.

Nazara Technologies, the Mumbai-based mobile entertainment provider and online gaming firm, is inching closer to get a second round of funding from two private equity firms in early January.
 
An industry source in know of the development said that two overseas PE firms, including Sequoia Capital will invest around $7 million in Nazara.

It has been learnt that Sequoia deal has been sealed and Nazara will make an official announcement on January 7, though promoter and chief executive officer of Nazara Technologies Nitish Mittersain declined to comment anything at this stage.

“Margins in the cricket and gaming are as high as 40% compared to other space like music, ringtones where it’s around 5%. We have targeted the mobile value-added services space in a big way,” Mittersain added.

Nazara had got first funding of $1.5 million from Sequoia Capital.

Sequoia Capital has investments in Mauj ($10 million), Bharti Telesoft ($12 million), Nazara ($2 million), Bubbly Motion ($10 million).

According to Associated Chambers of Commerce and Industry of India, a reduction in basic customs duty from 10% to 5% and elimination of additional customs duty could enhance India’s current share of 0.25% in the $30 billion global market to 3% by 2010.

Nazara develops a range of branded and original mobile content for the culturally diverse consumer base in the country and combines technology with a compelling experience to create innovate applications in the mobile environment. Nazara also provides complete solutions for the development, deployment, targeting and tracking of promotional campaigns on emerging mobile platforms.

Nazara holds exclusive wireless content licenses for a wide range of brands, including Sachin Tendulkar, MS Dhoni, Virendra Sehwag, Stardust Bollywood images, Archie Comics among many others.

It also developed Rounder Poker game, which was nominated for International Mobile Gaming Awards (IMGA) 2007. The game is listed among the first five out of 392 games from 42 countries in the nomination list for the best IP based games category.

With gaming gaining popularity among children and grown-ups alike, leading players are seeking to cash in on the opportunity. Apart from Sequoia, firms such as Northwest Venture Partners, Lehman Brothers and Matrix Partners are chasing opportunities in telecom value-added service players.

Competition in this space is tough as many internet and telecom service providers have made inroads and have established themselves. Gaming companies are moving up the value chain and developing original content.

Mumbai-based Jump Games has tied up with Virgin comics and is all set to unveil the Ramayana game. Reliance ADAG’s gaming firm Zapak will soon launch a R&D centre in Pune and is eyeing the international market. Zapak has launched Gaming cafes and ADAG has set aside $100 million for its gaming venture and aims to open 3,000 gaming cafes by 2010.

r_mithun@dnaindia.net