Listed gaming firm Nazara Technologies, which had allocated more than $100 million for its merger and acquisition warchest, is raising another Rs 900 crore ($107.5 million) through a preferential issue of equity shares. This would be the largest fundraise so far for Nazara.
The company, which has been on an acquisition spree in the last few months, will dedicate the fresh capital for more inorganic growth, as the company gears up to bolster its international presence.
“This capital infusion will fuel strategic acquisitions, fund business expansion, and enhance the company’s ability to seize new growth opportunities,” the company said.
The investors participating in the latest round will include SBI Mutual Fund, Junomoneta Finsol (an associate of Plutus Wealth), Think Investments, Discovery Investments, Mithun and Siddharth Sacheti, Cohesion Investments, Chartered Finance and Leasing, Ratnabali Investments and Aamara Capital, it said in an exchange filing Wednesday.
The development comes about a month after co-founder and chief executive Nitish Mittersain said the company may spend $100 million more than what initially planned on mergers and acquisitions, financing some of them partly through debt and with its subsidiaries carrying out the deals on their own balance sheets.
Further, Nazara will hike its stake in Absolute Sports, the parent company of sports media company Sportskeeda.com, by an additional 19.35%. The company will pay Rs 145.5 crore for the stake in a cash-cum-equity deal, it said in a filing.
“Additionally, increasing our stake to 91% in Absolute Sports (Sportskeeda) reinforces our leadership in the sports media landscape,” Mittersain said in a statement.
Nazara had first backed Absolute Sports in 2019, valuing the company at about Rs 66 crore. The latest deal takes its valuation to about Rs 750 crore.
In FY24, the company’s revenue grew by about 60% to Rs 196 crore compared to Rs 122 crore previously. It recently acquired Pro Football Network (PFN), SoapCentral, and Deltia’s Gaming.
“The growth of Absolute Sports, from its early days as a startup to becoming a global media player, underscores our commitment to supporting innovative teams that consistently deliver transformational growth,” he added.
Nazara, founded in 2010, has been going heavy on its ‘acquire and scale’ strategy over the last few years. It operates in a decentralised manner, allowing these businesses to operate autonomously by their management. The company has added multiple offerings across interactive gaming, e-sports, adtech and gamified early learning ecosystems through its inorganic strategy.
“My vision is how Nazara can deploy $1 billion in capital over the next five years,” Mittersain said in an interaction last month. “We don’t have a fixed mindset. We’ll try to do more, as much as we can.”
“We started with $100 million. If we do good acquisitions and we deliver good results, hopefully through a mixture of equity, debt and cash, we will be able to take larger bets and grow the business,” he had said.
Nazara has been focusing on businesses with established gaming intellectual property or studios, and ones with offerings in cutting-edge technologies like Web3, virtual reality, and AI. It is eyeing companies with core gaming IPs, generating Rs 100 crore in revenue and are profitable, and are sustainable over a long period of time.
