Early-stage gaming-focused venture capital firm Lumikai, which has backed startups like All Star Games, Loco, Crater, Eloelo, Studio Sirah, Bombay Play and CloudFeather Games, has hit the first close of its latest vehicle which will look to invest in pre-seed to series A rounds of gaming and interactive media firms in India.
The New-Delhi based fund, which has targetted raising a corpus of $50 million for its second fund, has already received commitments for nearly $25 million from a clutch of global and domestic investors.
These include publicly listed Japan-based gaming giants Mixi and Colopl, South Korean multi-billion-dollar conglomerates Krafton and Smilegate, Finland-based Supercell, and Indian strategic players including Nazara.
Select large Indian family offices including the Jeejeebhoys, KCT Group, DSP Kothari, and Sattva Group as well as high-net-worth individuals (HNIs) also participated in the funding mop-up. Some of the notable HNIs include Take-Two Interactive’s former CEO Ben Feder, Napster CEO Jon Vlassopulos, Gulf Islamic Investments’ founder Pankaj Gupta and Nodwin Gaming’s founder Akshat Rathee.
“We are looking to invest in 18-20 new companies from the second fund. However, we do have a certain allocation towards doing follow on investments in fund one’s portfolio companies,” Lumikai’s founding general partner Salone Sehgal told VCCircle. The fund is currently in the term sheet stage with three companies.
The fund will invest across five key thesis areas gaming content - original IP and digital media; UGC (user-generated content) platforms and creator economy; tools, technology and infrastructure; companies leveraging “systems of play,” applied game mechanics and interactive touchpoints across value chains, and frontier bets, including mixed reality, generative AI, virtual identities and edge computing.
“Since the beginning, our ambition was to unlock a new asset class for investors by turbo-charging founders within the ecosystem. Over the course of the last three years, we have seen 1,400+ deals in the industry, highlighting investor interest, deepening founder quality and achieve liquidity events. We continue to remain bullish on the long-term potential of India’s interactive market and this is our opportunity to build on the foundation we have laid,” Sehgal said.
In addition to the global corpus, the firm is also inviting domestic rupee-based capital with the setup of a dedicated $10 million alternative investment fund for Indian limited partners (LPs). With this, Lumikai’s total investment into India’s gaming and interactive media sector will stand at about $100 million.
Lumikai launched its first fund in August 2020.
“We have already deployed 75% of the corpus from the first fund and will use the remaining corpus for follow-on investments in portfolio companies,” Sehgal told VCCircle in an interaction.
Earlier in April, Lumikai, in a joint report with Amazon cloud services arm AWS, highlighted that the e-sports market in India is gaining momentum with more companies joining the bandwagon, and is projected to triple in size by 2027 at a compound annual growth rate (CAGR) of 32%.
Justin Shriram Keeling, founding general partner at Lumikai, said that the report shows a diverse market maturing faster than expected across key vectors.
He also highlighted the opportunities in the sector, including a largely young, professional gamer category who are increasingly paying for in-app purchases, an untapped audience of female gamers, and a strong interest in games with Indian cultural resonance.
