Venture Capital Fund Lumikai predicts surge in investor interest in Indian gaming sector

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The online gaming industry is set to attract investors in 2024, driven by the expanding consumer base in India, according to insights from Lumikai, a leading venture capital fund dedicated to gaming. Salone Sehgal, the founding general partner at Lumikai, highlighted a surge in deal-making, particularly noting the active investment landscape in December 2023. Sehgal revealed that Lumikai is currently finalizing follow-up funding rounds for two promising companies.

As reported by Mint, Eloelo, a live social entertainment platform, secured a $22 million in funding towards the end of last year, marking one of the notable investments in the gaming sector. Sehgal emphasized India’s remarkable growth trajectory and consumption patterns amidst global economic challenges, predicting heightened interest from both strategic and financial investors.

Despite a funding slowdown in 2023, Sehgal pointed out that the record fundraising in 2021 and 2022 has left numerous funds with substantial unallocated capital, positioning them to explore opportunities in the gaming sector.

With Lumikai’s $50 million Fund 2 launched last year, Sehgal disclosed that the fund has already made three investments and is eyeing four more deals in the coming year.

Highlighting the resilience of India’s gaming market, Sehgal cited a notable 20% increase in consumer spending on mobile gaming in India in 2023, contrasting with a global decline of 2%. Sehgal elaborated on the growing foreign investor sentiment towards India, attributing it to the pursuit of high yields and market potential, which bodes well for the Indian gaming landscape.

A report by Lumikai revealed that India’s gaming market reached $3.1 billion in fiscal year 2022-23 (FY23), with projections indicating a surge to $7.5 billion over the next five years. The report, conducted in collaboration with Google, anticipates future growth driven by in-app purchases and ad revenues in casual and mid-core games.

Sehgal also emphasized the emergence of entrepreneurial talent within the gaming sector, fueled by India’s vibrant market development. This surge has seen a rise in operators, product managers, game designers, and technical leads eager to venture into new opportunities, either domestically or globally.

Reflecting on the thriving startup ecosystem, Sehgal revealed that Lumikai has evaluated over 1,700 companies in less than three years, exceeding initial expectations. This growth signifies the gaming sector’s potential as a niche space for venture capital attention, offering abundant opportunities for investment and innovation.