The exponential surge of the online real money gaming (RMG) sector is driving investors to focus more on this sector. Real money gaming platform Big Cash which comprises Rummy, fantasy sports as well as casual games are in talks with investors to raise $30 million. Initially, the company was bootstrapped and now it is aiming to raise funds for expansion of its business.
In conversation with AnimationXpress, Big Cash founder and CEO Ankur Singh shared, “We’re in talks with investors for raising $30 mn. The timing of the funding matches up to our expansion plans for the current and the next year.” Singh further stated that the fund will be utilized in two important areas of their expansion plan. “One is, marketing / user acquisition, as we plan to double our active users from 25 mn to 50 mn this year. The second is to increase our developers/talent pool as we go about introducing new games and providing even better gaming experience. Both these investments will give a major boost to the sustainability of our business model,” he added.
According to Singh, the Indian RMG industry will grow at 40 per cent CAGR and it started witnessing the light in the day. Because of which the investors have been betting big on real money gaming platforms. “Three of the top real money gaming platforms have already attracted investments of over $ 1 billion by now. RMG is where the action lies today,” he added.
He further explained that the interest of the investors in the Indian market is not sudden. In fact, the investors initiated investing since 2017 when the gaming platforms were in the start up phase. The initial stakes have increased over the years with the infusion of more funds, for example- the funding pattern in Dream 11 or MPL.
“Investors are looking at three crucial aspects in a gaming company – (a) sustainable business model, b) growth curve/trajectory, and c) people or talent pool. Additionally, it is the sunrise nature of the RMG segment and the huge market that India alone poses that is attracting investors. Most investors feel Indian gaming firms can take on the global market and today would be the right time to partner them,” he said.
As the sector is growing, the investment rush in the sector is also growing and the reason behind attracting more investors is depending on two reasons; firstly, the gaming businesses are taken up by the next generation of entrepreneurs which is attracting investors and gaming itself is an attractive business segment to investors. Secondly, the Government is also showing interest in gaming and planning to unveil a set of guidelines for the sector pretty soon so it is bolstering investors to bet big in the sector .
Commenting on the challenges the RMG market is facing while receiving an investment today Singh stated:
“Lack of understanding of the business was a challenge a few years ago. But that has changed. Investors today are educated on the nuances of the RMG business and they are asking pertinent questions. Add to that, investors have live examples of successful gaming models right here in India. Not exactly challenges but investors are looking at three objectives of funds utilisation. One is the purpose, the second is the condition that the purpose must stimulate growth, and third, that the growth be sustainable.
The challenges for RMG company therefore are:
- a) the wait for regulatory framework;
- b) competition and differentiating aspects on products;
- c) quantum of investments required for achieving the growth.
With the above in place, we think the investors would be willing to invest and partner with RMG businesses.”
Since new gaming businesses are popping up each day considering the surge of the users in the sector, therefore, investors are investing only after closely observing the capabilities of the firm.
“Which basically means an RMG must have demonstrated a certain amount of success before seeking investment. Secondly, investment must be in line with the business projections and the amount raised should be equivalent to projected growth. The key is also to protect the interest of promoters while investments are raised,” he expressed.
As of April 2021, Big Cash has registered a user base of 25 million, with monthly average user base of 2.2 mn and a retention rate of 75 per cent . Currently the platform has 17 games with Call Break being the most recently added card game. By the end of this year the company is aiming to double its registered user base by 50 million.
