Anuj Tandon has joined Bitkraft Ventures, a seed-stage investor for interactive media and games, as partner focused on the fast-growing Indian game market.
Tandon brings nearly 15 years of experience as a gaming entrepreneur, executive, and investor in India to Bitkraft’s team, establishing the venture capital firm’s footprint in the region. That can be a big deal, as a single partner can do a lot of deals to kick off investments and build a game ecosystem.
India’s online gaming market is one of the fastest growing in the world as per the latest report from PwC, projecting to grow at 14.5% between 2023 and 2028, nearly double gaming’s global growth. Tandon’s expansive network in India gives Bitkraft a strategic opening into this rapidly expanding market.
As a Bitkraft partner, Tandon will seek to invest in innovative Indian gaming and interactive media companies, with a particular focus on AI, games tech, and content—making the interactive media VC firm one of the first global early-stage investment platforms in the country.
Tandon’s experience includes successfully leading Krafton’s investments in India and the Middle East/North Africa, bringing the billion dollar entertainment brand Yoozoo Games to the region, and more. Before joining Bitkraft, Tandon was the CEO of Gaming at JetSynthesys, India’s leading digital
conglomerate where he managed all their gaming assets.
India has been a software development powerhouse for quite some time already with a deep pool of technical talent. The Creative and Entertainment industry has been picking up visibly over the last decade and the Indian gaming industry revenues are projected to double, reaching $7.94 billion by 2028 (Source: PwC).
A second generation of games entrepreneurs is forming and will set out to build internationally successful companies. With Tandon’s expertise, Bitkraft believes they will be equipped to support the country’s innovative companies and provide the resources they need to achieve their goals on a global scale.
“We have made several investments in India already, but our ambition is to increase our activity and capital deployment in the country visibly going forward. This is where Anuj’s experience and network in the Indian games and entertainment industry is crucial to us and our ability to identify and partner with the most outstanding entrepreneurs in India,” said Bitkraft founding general partner, Jens Hilgers, in a statement. “It is more than just having a person on the ground; it is the deep understanding of the market, the actors, the local preferences and dynamics from people to design and product to financing.”
At Krafton, Tandon built the company’s India and MENA strategy, investing more than $135 million in high growth startups such as FRND, Nautilus Mobile, Nodwin, KukuFM and more, in less than two years. Bitkraft has more than 130 portfolio companies and it has $1.05 billion under management. Hilgers founded the firm in 2016. Now it has six funds. I interviewed Tandon recently.
Here’s an edited transcript of our interview.
GamesBeat: What led to this change for you?
Anuj Tandon: I’ve been in the game industry for the last 14 years now. I started off at a company called Rolocule in India. I was a co-founder. That was back in 2010, when gaming was simpler. Paid games. There was no free-to-play at the time. We made some very cool games. The company was eventually acquired by Dream11, which is a fantasy gaming giant in India. Then I worked for Nazara for a year, building a game publishing business.
After that I worked for a Chinese gaming company called Yoozoo Games, at their India office. Yoozoo was a pretty decent company, one of the first Chinese companies to enter the Indian market. I worked there for four and a half years, before the whole India-China geopolitical thing happened. Then I went to Krafton. Krafton is the maker of PUBG. I joined in a different role, as an investor. I deployed more than $135 million for them in new age media and entertainment, interactive media, and gaming. That was in India and the Middle East. My last gig was as an operating partner for different gaming efforts at an Indian company, JetSynthesys.
That’s the background. Operator, investor, and entrepreneur. Bitkraft happened because I honestly feel we’re at the right time in India. I’ve seen the journey of the Indian gaming market from inside and outside the trenches. It’s a very interesting market. Now it’s starting to show some signs of monetization, of mass user penetration yielding actual strong revenues for certain games. The second generation of gaming entrepreneurs is coming in. It’s a nascent market still. It’s immature in terms of gaming talent. But we’re seeing people who have done some exits. They have some liquidity. They want to build game companies. It’s an interesting time to enter the market.
GamesBeat: I wrote recently about Lumikai’s report. They were predicting that India’s gaming market was going to grow from $3.8 billion to $9.2 billion by 2029.
Tandon: Everyone has their different predictions. PWC is predicting it will go from three to eight. There’s an optimism about the market that I share. But more than that, it’s one of the few markets where there’s still growth happening. There’s political stability. There’s a massive IPO market for tech startups. India was one of the highest IPO markets last year. More than 25 tech startups are planning to IPO next year. There’s a lot of liquidity happening in the startup ecosystem, which has been building for the last 15 years. You’re starting to see the flywheel moving – investments, liquidity, exit.
I’d position it as similar to what happened in 2008 to 2012 in China. There was only one publicly listed gaming company, Shanda Games. In India there’s Nazara. Then a bunch of IPOs like Tencent, Yoozoo, Netease. All these guys went public. That’s the exciting part of all of this.
GamesBeat: There’s plenty of room for more venture companies besides someone like Lumikai.
Tandon: The key differentiator is–gaming in itself is a global business. Content from any country can cross borders, be international, and find users everywhere. I’ve been an entrepreneur myself. I raised funds in 2012 for gaming in India. The biggest challenge I’ve seen for startups is a lack of a peer network that’s more global, a lack of a mentor network that’s more global. India is a very immature gaming ecosystem. “Immature” might be the wrong word. It’s very young. People only started playing games in 2016. There was no console or PC cycle on any meaningful scale. Entrepreneurs building right now are making mistakes that people in the western and eastern markets that have already made and learned from.
When your entrepreneurs want to do new things and build new things, having a peer network that’s more global, a strong mentor network, that’s important. That’s why I think a global fund makes so much more of a difference in the lives of these second-generation founders that want to build global gaming companies from Indian gaming companies.
GamesBeat: How did you get in touch with Bitkraft? Had they been looking at the market for some time? What were the circumstances that led them to get interested?
Tandon: In my Krafton role, I had the gaming platform to invest in the market, build a strategy, a thesis, all of that. The portfolio was pretty awesome. Sort of a self-plug there. But it’s a very decent portfolio. That platform gave me an opportunity to network with a lot of people as well. Bitkraft already has four portfolio companies without even having a dedicated strategy so far. That’s why they got in touch with me. I met Jens this year at GDC. We started having discussions about strategy. It’s been a decently long process of knowing them. They’ve been tracking the market, tracking the people who’ve been in the market. There are very few people who are both operators and investors in gaming and interactive media in India. Very few people have that local knowledge.
GamesBeat: Was there an expectation you had, that this was moving in parallel to something like China 10 or 15 years ago?
Tandon: I worked in a Chinese company very closely with the founders there at Yoozoo. You know Lin Qi, God rest his soul. He was the founder of Yoozoo. He died in 2020, unfortunately. It was a big scandal in the Chinese game industry. But that gave me a front row view of how consumer gaming startups and gaming and interactive media scaled in China. What was the playbook? How did they do publishing? How did they do game development? How do you scale live streaming and esports?
My view is, yes, we’re finally starting to see the basic building blocks fall into place. For six to eight years it was all about users. If you wanted, as a consumer startup, to grow in India, it was all about DAU and MAU. But now you’re finally starting to see people talk about paying users, about average revenue per user. Those are now making significant numbers. When you have 450 million smartphone gamers in the country, even if you only have 1-2% conversion, that can be a pretty massive number. Even if the ARPPU is slightly lower, you can generate a decent business.
We’re following the same footsteps, but I think the ecosystem will be slightly different than China. Our user base is more westernized, at least at the top. The middle of the funnel is going to be more similar to China in terms of their consumption habits and paying habits.
GamesBeat: What do you see at the opportunity in made for India games versus Indian companies making global games?
Tandon: I think about two things. Indian content being exported in gaming, that’s a no-brainer. Global cultural shifts happen every few years. Korean content, Japanese content, some stick and some don’t. Indian content is going to be massively produced for a global audience. There’s a massive Indian diaspora in a lot of countries that will consume Indian content and gaming.
India to India, already we’re seeing some signs. If you look at the top MAU and DAU games, they’re local board games, local card games that people are playing. That’s the first sign that Indians are more interested in playing more local content than global. Of course, the payments and sophistication of game development is still reaching. I’m bullish on both. I think as an immediate tactical opportunity, India to global will be a better opportunity. But certainly India to India makes so much sense. There’s a lot of local stories. There’s a history to it. When television started in India, when animation started in India, global content dominated the Indian scene. Slowly but surely, though, Indian content started to dominate. That’s happened with other media and entertainment, and I think it will happen with gaming as well.
GamesBeat: What categories do you like to pay attention to as far as the potential for Bitkraft investments?
Tandon: We’ll still follow our core thesis. You have content. You have interactive media. Applied game mechanics, infrastructure tools, and technology for gaming. We’re not moving from our four core pillars of investments we do. It will be similar to what we already do globally. But there will be unique local solutions and local companies that we’ll find in this space.
GamesBeat: You mentioned a few investments already. Is there a fund that’s mostly associated with this? Has some of that started to get deployed already? Or are you coming in fresh, not having done an investment yet?
Tandon: As a platform Bitkraft has already invested in India through its various funds. There are three to four companies that we already have, and that are doing very well. Going forward, there are going to be a few more companies. The exact strategy that will play out is still a work in progress. The whole point of hiring a local partner is to focus on that area more, and in other emerging markets as well, like the Middle East.
GamesBeat: Does Bitkraft have more local partners around the world, or are you one of the first?
Tandon: We have a very diverse team geographically. We’re located everywhere. We have a principal in Singapore looking at that area. We previously had a partner in Korea. But at a partner level this is the first, as far as I know, the first strategic focus on a market like this that deserves special attention. This is the first time we’re localizing in India.
GamesBeat: Do you see other game-focused venture capital funds doing this, finding partners in India or otherwise investing in Indian game companies?
Tandon: There are other large gaming funds that also have a lot of Indian deals. But most of their sourcing network is through local VCs, which do not have thesis-based gaming-focused investing. There’s interest, but there’s no consistency or focus on this specific area. In my opinion, this is a big validation for the market. It shows there’s a lot of potential, that a large fund like Bitkraft has a dedicated strategy for emerging markets and India.
GamesBeat: I recently spoke to Dino Ying from VSPO and Hero Esports. He talked about investing in esports in China a long time ago, and how long a road that’s been. They eventually found recognition from the Saudis. The Saudis made a big investment. That made it much more global as an effort. He talked about how he had to be patient for many years, enduring a lot of losses before it eventually became a better business. Is that something that you foresee Indian companies still having to deal with, especially in the esports category? Is there a long road to look forward to still?
Tandon: Specifically for esports–one of my first investments at Krafton was Nodwin Gaming. They also received investment from Sony and Nazara. That’s one company that’s profitable in esports in India. It’s tripled in valuation over the last three years. It’s scaling very fast. Yes, you have to be patient in certain genres and subgenres or sectors. Patience matters. But the strategic opportunity of this market, through an investor lens, is very high. There are companies that are going to go public, and they’ll acquire startups for diversification for whatever reason. There’s a lot of strategic interest in the market to expand. From a fund perspective that’s a great place to be. Even if there’s cash flow or profitability issues in certain sectors, they’re good acquisition targets. We’ve seen that with VSPO.
GamesBeat: Do you have any other comments on particular kinds of companies that are attractive, or regions within India where you might focus?
Tandon: India is a huge country in terms of area, but the main centers of entrepreneurship for most of the tech startups are in three to four areas: Bangalore, the Mumbai cluster that includes Pune, New Delhi, and to some extent Hyderabad and the rest of the smaller cities. These are where most of the startups are geographically. But a lot of Indian founders are already aspirational as far as reaching out to global investors. The knowledge that international investors bring to founders has helped with their international expansion. The profile is way better than what a local venture capital fund would have. That’s my thinking. That’s how we’ll be able to get a lot of good quality entrepreneurs to work with us.
GamesBeat: Have you known Jens Hilgers since before coming to Bitkraft?
Tandon: Of course. We’ve interacted for three or four years. We’ve always kept in touch about the Indian market. I’ve been in touch with most global investors, because whenever they need to understand the market in India or the Middle East–there are very few people who have actually done investments in these regions and successfully acquired studios. There’s a lot of interest in a person like that in these regions for knowledge-gathering and so on. Jens has been very curious about the market. The time to do it is probably now. Two or three years ago, it wasn’t a very attractive early stage investment market.
GamesBeat: How stable has the job market been in India? In the U.S. and the west in general, the last 30 months have seen constant layoffs. One consequence is that there has been no shortage of talent available to go to startups. A lot of startups have been formed by teams that were let go. Has that happened in India as well? Is there another source of talent that you find there?
Tandon: I gave a talk at the Bitkraft Summit where I started by saying that whenever I come to the U.S. for an event in gaming, the news isn’t very positive. I’m living in an oasis of open optimism. Our markets have been in a growth phase. We’ve seen probably the highest startup funding in gaming happening in the last year or two. Of course there are supply chain issues with AI and so on, which are correcting on the overall industry level. But India and the Middle East are the two biggest growth markets for mobile gaming and gaming overall. There’s a lot of hiring activity. There’s a lot of investment activity, new startup activity. The ARPPUs are growing. It’s different from the other markets. That’s why we’re hopeful that this will carry on.
The overall sentiment is optimistic as well. India is the fastest-growing economy in the world at this point. A lot of factors are contributing. The macro tailwinds are very strong.
GamesBeat: Have Indian game companies picked up a lot of talent from the tech sector in general?
Tandon: If you think about the companies where people get their experience, there are a lot of centers in India. Zynga has a pretty massive team in India. To give an example, Zynga alumni have generated more than $600-700 million in enterprise value, just in new gaming startups they’ve created in the last five to six years. These are cash exits. PlaySimple, Moonfrog, those two companies were acquired by MTG and Stillfront. There are many others, in other sectors as well, where Zynga alumni have had an impact. Just one company has made that impact. Then you have EA. They have a team where people have branched off into startups. Ubisoft has around 1,200 to 1,400 people in India. Scopely now has a lot of people.
There are a lot of offshore centers that were created where people have leveled up in the value chain and started running their own games. A lot of Indian startups in gaming that are getting funding have also started to hire western talent. As you said, the job scene in the western markets isn’t great. I’ve seen a lot of good quality western talent coming into India and building studios with their experience. One of them is a portfolio company of ours, LILA Games. Joseph Kim moved to set up a studio in Bangalore. That’s a global founder setting up a team in Bangalore to build games.
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