Fantasy esports platform FanClash lays off 75% of staff within a year of raising $40 million

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FanClash, one of the biggest fantasy esports platforms in Asia, has reportedly laid off up to 75% of its workforce. Backed by Sequoia Capital, the Delhi NCR-based gaming platform has now joined the list of Indian startups who have laid off employees over the last year.

The company has dismissed around 100 employees in three rounds of layoffs this year itself. According to Inc42 sources, all the affected employees received a two-month salary as part of the severance package.

The ban on Battlegrounds Mobile India (BGMI) is being dubbed as the main reason for layoffs and the company’s struggle. The sources revealed that even though it focused on fantasy for other esports games like FreeFire, COD Mobile, COD PC, Valorant, CS:GO, League of Legends and DOTA 2, BGMI was the main source of revenue.

One of the sources believed that gamers preferred playing the game directly compared to choosing to create fantasy esports teams, unlike followers of other mainstream and traditional sports such as cricket and football who actively play fantasy games in large numbers. This aspect prevented the company from gaining adequate number of users.

Another sourced said that due to the winter/festive break in December, the user count for FanClash took a big hit as there were no major esports tournaments lined up. This was also the time when the layoffs took place.

In addition to letting go of its staff, the firm closed down its Web3 fantasy game network called FanGuild, and ceased operations of its fan engagement platform FanSpace, too.

An employee requesting anonymity said, “Considering the temporary uncertain environment towards mobile esports, we had no option but to restructure our business, which meant that we had to ask 75 per cent of our workforce to leave.”

As a result, the company chose to tweak its business model to concentrate on fantasy esports centered on computer game franchises like CS:GO and DOTA, a source said. The source also said that FanClash currently has enough funds to move forward with the business plan.

The company had raised $40 million in its Series B funding round in June 2022, led by Alpha Wave Global with Sequoia Capital India, Polygon, and Info Edge also taking part. Prior to that, in August 2021, Sequoia Capital India and other investors contributed $10 million to the startup’s Series A round. Meanwhile, the company had hosted the first CS:GO tournament of the year in January.