The Indian government’s sweeping ban on real-money gaming (RMG) has left venture capital investors staring at potential write-offs worth nearly $15 billion, with startups scrambling to pivot their business models. The sector, which collectively raised over $2 billion in funding, is now facing its toughest regulatory challenge yet.
Venture Capital Under Pressure
Global and domestic funds — including Tiger Global, Peak XV Partners, Malabar Investments, Think Investments, Orios Venture Partners, and Z47 — had backed leading players such as Dream Sports (Dream11), Mobile Premier League (MPL), Games24x7, and Zupee.
However, with the blanket ban, several investors fear most of these bets may turn into near-total write-offs.
“These companies are going to be very largely a write-off because the business is shut effectively,” said Rehan Yar Khan, Managing Partner, Orios Venture Partners.
Startups Exploring Alternatives
- Dream Sports (Dream11 parent) → Piloting a wealth management product.
- Winzo Games → Expanding into the US market and launching micro-drama content.
- Probo, MPL, Zupee → Shut down their RMG products and exploring ad-supported contests and overseas operations.
Still, experts warn the ad model won’t match RMG profitability, as user engagement may drop without monetary incentives.
Industry Shakeout
Real-money gaming had been a significant revenue driver for these startups:
- Dream11 – FY23 revenue: ₹6,580.8 crore; Net profit: ₹443.6 crore.
- Games24x7 – FY23 revenue: ₹2,023 crore; Net loss: ₹199.6 crore.
- Gameskraft – FY24 revenue: ₹3,521.4 crore; Net profit: ₹947.8 crore.
Meanwhile, Nazara Technologies, the only listed player with RMG exposure, saw its market cap decline by ₹2,164.9 crore in a week after the government’s decision.
Investor Sentiment
While some funds admit to likely losses, others see potential for pivots:
“Most VC investors didn’t come in only for RMG. They believe in the long-term evolution of India’s gaming ecosystem. This shakeout could spark innovation,” said a partner at a VC firm with exposure to gaming.
Disclaimer: This article is for informational purposes only and not intended as investment advice. The views quoted are sourced from industry stakeholders. Readers should consult financial advisors before making investment decisions.
