PlaySimple makes it rain

Modern Times Group, a Swedish gaming company, has acquired Bengaluru-based startup PlaySimple for $360 million, the two companies announced earlier today. The deal marks one of the largest exits by an Indian startup.

Make it rain

GIF Credit: Giphy

Also in this letter:

💰 Licious lands $192 million
💸 Robinhood set for IPO
🎮 Krafton launches local PUBG clone

Tomorrow on ETtech Unwrapped, our weekly newsletter: The US government’s efforts to break up Big Tech firms saw two major setbacks last week. Meanwhile, India’s competition regulator is investigating the business practices of Facebook, Google, Amazon and Flipkart. We delve into the details and explore the differences between the two country’s competition laws. You can sign up for ETtech Unwrapped here.

Now back to the news.

Swedish gaming giant buys PlaySimple for $360 million


PlaySimple cofounders

Swedish gaming giant Modern Times Group (MTG) has acquired a 100% stake in word games developer PlaySimple for $360 million in a cash and equity deal. This is among the largest cash exits ever for an Indian startup. Byju’s bought WhiteHatJr for $300 million in August last year.

Details: MTG, which is buying the company through its subsidiary MTG Gaming, will pay 77% of the acquisition price in cash and the remaining 23% through its Class B shares. The deal also includes additional performance-based cash payments worth $150 million.

Investors exit: Early backers of the firm include Elevation Capital (previously SAIF Partners) and Chiratae Ventures, who had invested about $4 million at a valuation of $16 million in 2016, will be exiting the firm. Elevation Capital owned a 19.7% stake in the company while Chiratae Ventures had a 14.4% stake. PlaySimple cofounders owned a combined 56.7% stake in the company.

Shareholders of PlaySimple

What does PlaySimple do? The Bengaluru-based firm has developed and published a portfolio of nine casual games. Daily Themed Crossword is its most successful title to date. Other titles include WordTrip, WordJam, WordWars, WordTrek and Solitaire.

Big numbers: These titles have together clocked over 75 million installs and seven million monthly active users, of which 1.9 million are active daily. Women make up about 80% of its users.

Revenue jump: PlaySimple’s revenue jumped 144% to $83 million in the calendar year 2020 with adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $18 million. For the first six months of 2021, the startup’s revenue rose 82% to an estimated $60-64 million while the adjusted EBITDA soared 140% to $17-18 million compared to the corresponding period last year, MTG said.

What’s the plan? Acquisitions are a key part of MTG’s strategy. Since December 2020, it has acquired three gaming companies — mobile gaming racing studio Hutch Games for $275 million (excluding performance-based payouts) last December, New Zealand-based tower defence gaming studio and publisher Ninja Kiwi for about $141.3 million (excluding performance-based payouts) in March, and now PlaySimple. It also owns city-building and strategy game developer InnoGames and mobile game publisher Kongregate.

  • The Swedish firm said these acquisitions will help them build a gaming vertical that is “significantly more diversified in terms of genres, audiences, and revenues, which provides improved visibility, stability and opportunities.”

What’s next? PlaySimple has four more games in the pipeline, to be launched later this year. Two of these games are card games, a new genre for the company.

Licious lands $192 million from Temasek and others

Licious founders

Licious cofounders Vivek Gupta (L) and Abhay Hanjura

Licious, a direct-to-consumer (D2C) fresh meat and seafood brand, has raised $192 million financing led by the Singapore government’s investment company Temasek Holdings, and Multiples Alternate Asset Management. ET was the first to report this deal.

Valuation jump: The round values the company at around $650-$700 million, sources told us, a significant jump from its $250-$300 million valuation when it raised $30 million in late 2019.

  • The financing has also given an exit to a few early angel and institutional investors. Around 30% of the funding is secondary, while around 70% is primary, Licious cofounder Vivek Gupta told us.

What’s the plan? Licious plans to use the funds to invest in technology to enhance its supply chain, for quality improvement, and to grow its presence across India.

Big picture: According to industry data, 92% of the Indian meat and seafood industry is unorganised, indicating the huge opportunity that this sector has to offer. This has led to growing investor interest in the on-demand food segment, especially in the meat and seafood category.

Also read: Investors are betting on startups making lab-grown meat

Here’s a look at the top funding deals in the past week.

deals digest

Tweet of the day

Robinhood unveils its IPO filing

Robinhood logo illustration

Online brokerage app Robinhood has set the stage for a much-awaited public market debut by unveiling its IPO paperwork. It had filed confidentially for an initial public offering in March.

  • Since its inception in 2013, Robinhood has raised over $5.5 billion from investors including DST Global, Ribbit Capital, ICONIQ, Andreessen Horowitz, Sequoia Capital, Index Ventures and New Enterprise Associates.

IPO for the masses: Robinhood will set aside about 35% of its shares for retail investors through its recently launched IPO Access feature, which allows retail investors to buy IPO shares of participating companies prior to public trading.

Revenues soar: Over the past year, Robinhood has seen huge growth as people stay indoors during the pandemic. Its revenues soared to $958.8 million in 2020 from $277.5 million in 2019. For the first three months of 2021, the startup reported revenues of $522.2 million, a massive jump from $127.6 million in the corresponding quarter last year.

  • It posted a net loss of $1.4 billion for the quarter, although it was entirely due to $1.49 billion cost tied to the emergency cash infusion during a trading frenzy on Gamestop and other meme stocks, fueled by small retail investors earlier this year.

The Dogecoin Factor: About 17% of Robinhood’s revenues came from cryptocurrency transactions in Q1 2021, as compared to 4% in Q4 2020. Dogecoin accounted for 34% of its cryptocurrency transaction-based revenue in the first three months of 2021, as compared to 4% in the last three months of 2020.

Interestingly, the company mentioned Dogecoin as a risk factor, saying that its business and financial condition could be adversely affected if the markets for Dogecoin deteriorate or if the price of Dogecoin declines.

Krafton launches Battlegrounds Mobile India

Krafton officially launches Battlegrounds Mobile in India to repeat PUBG success

IPO-bound Krafton has officially launched Battlegrounds Mobile India, a local version of its popular PUBG Mobile gaming title. PUBG was banned by the Indian government last year amid border tensions with China since Chinese internet giant Tencent was the publishing partner of the original game.

The China headache had resurfaced less than a fortnight ago following reports that Battlegrounds could be sending data of Indian players to servers in Beijing. In response, Krafton said it had shared game data of Indian users with third parties but that did not violate its privacy policy.

  • The company said that almost 40 million signed up for the game since pre-registration opened on May 14.

Why does it matter? India is the biggest market for PUBG, accounting for more than 28.8% of the game’s 644 million downloads as of last September, according to app intelligence firm Sensor Tower. The app still had over 38 million users in the country as of last month, according to TechCrunch citing App Annie data, with several gamers sidestepping the ban with VPNs and other workarounds. Krafton IPO: The launch comes as the South Korean video game developer is gearing up for its initial public offering. On Thursday, the company cut its IPO target by nearly a quarter after a local financial watchdog warned it to revise its prospectus due to insufficient or unclear descriptions of unspecified important matters, according to Bloomberg.

Pent-up demand drives smartphone sale recovery in June


Smartphone sales recovered faster than expected in several states in June, including Maharashtra, Punjab and Delhi, due to pent-up demand for the devices.

Smartphone sales rose 10-25% in June as compared to March in most northern states, while south India is almost at 100% revival, large distributors and retailers told us.

  • Smartphone shipments are expected to touch 12-13 million in June, equalling February-March levels, according to market intelligence firms Counterpoint Research and International Data Corporation.

Manufacturing has also stabilised to almost 75% capacity from the lows of April and May as infections among workers fall and restrictions start to ease in most states. Handset factories in the north, including those of Oppo, Vivo and Samsung, have ramped up production up to 75-85% of capacity, industry sources told us.

Today’s ETtech Top 5 was written by Vikas SN in Bengaluru and edited by Zaheer Merchant in Mumbai.

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