Lumikai launches India's first Gaming & Interactive VC fund

Lumikai, a venture fund focused 100% on gaming and interactive media made an announcement of a new early stage venture capital fund focused on India’s fast-growing gaming and interactive markets. The new sector focused lighthouse VC will fund up to 20 early-stage investments with cheque sizes between $200K to $2M. The fund is backed by a global investor base, including iconic gaming and technology companies from Japan, Finland, US, and South Korea, deploying long-term capital into India’s interactive entertainment market for the first time.

With the Indian gaming sector witnessing unprecedented growth amid pandemic lockdowns, a gaming sector fund has announced funding in the Indian gaming sector. Lumikai fund, backed by gaming and technology companies from Japan, Finland, the US, and South Korea has announced that it will invest in as many as 15-20 start-ups in the gaming ecosystem. However, the size of the fund is yet to be disclosed by the venture fund.

The new sector-focused lighthouse VC fund will look at early stage Indian startups with investment of between $200,000 to $2 million over the next five years.

According to Salone Sehgal, Partner at Lumikai, the fund has a distinct investment strategy to help interactive and gaming companies grow in scale. "The focus will be on early stage start-ups largely pre-seed, seed and a few at Series A with ample capacity to follow on," she said. The fund hopes to deploy much faster than the typical investment period of five years given the deep-flow in the sector. "We will do content bets which would be Intellectual Properties; we will look at platforms, tools, tech and infrastructure play which we closely relate to the gaming and the interactive market," she added.

Even though India might lead in the download numbers, the monetization for gaming companies still remains low. India does not even figure in the top 10 while countries like Canada, Italy and Spain which have users between 30-50 million generate upwards of $2.6 billion. Salone cites the example of PUBG phenomenon which has led monetization in India. "However if we go back and trace historically, wherever we have content, which has leveraged familiar mechanics in the discrete category, those companies have been able to build profitable sustainable businesses," she added.

Lumikai also sees an opportunity in the government's recent move to ban Chinese apps and closely scan Chinese investments into India. "Now is a great time for Indian content developers and content makers to bring their content out and put it on the app store and it's a great time for innovation for India, but however challenge is also on the capital side," said Salone. While the Chinese capital was helpful for Indian companies to scale, with renewed interest from other countries such as Japan, South Korea and the US in the Indian gaming market, the opportunities to tap are aplenty.