Nazara Technologies Soars 4% After Massive $2.2 Million Bet on Hot New Gaming Startup

Shares of Nazara Technologies Limited rose nearly 5%, reaching ₹1,008 in early trading on September 12, after the company announced that its subsidiary, Nazara Dubai, had acquired a 15.86% stake in gaming community startup STAN. This acquisition, valued at $2.2 million (approximately ₹18.4 crore), was completed through a secondary transaction involving existing shareholders.

At 3:30 pm IST, Nazara Tech shares were trading at ₹1,014, reflecting a 5.07% gain from the previous day's close on the NSE. Over the last three months, the stock has gained nearly 14%.

Nazara Tech's CEO, Nitish Mittersain, emphasized that "STAN’s mobile-first strategy and strong focus on community engagement aligns perfectly with our vision of becoming a leading force in global esports. This acquisition not only broadens our reach but also strengthens our commitment to supporting content creators and enhancing the gaming community."

As part of the deal, Nazara Dubai will acquire 317,333 shares from Akshat Rathee and Gautam Singh Virk, co-founders of Nodwin Gaming, Nazara’s esports subsidiary.

This marks Nazara Tech's second recent acquisition. Earlier, the company bought 5,157 equity shares, representing a 48.42% stake in Paper Boat Apps Private Limited, from its founders Anupam and Anshu Dhanuka. The deal, valued at ₹300 crore, includes an upfront payment of ₹225 crore. As a result, Paper Boat became a wholly owned subsidiary of Nazara Tech, with its subsidiary Kiddopia Inc. remaining a step-down subsidiary.

STAN, founded in 2022 by Parth Chadha, Rahul Singh, Nauman Mulla, and Shubham Gupta, offers a platform where creators can build and monetize communities. Users can engage with gaming personalities or celebrities via digital collectibles, chat or audio rooms, and exclusive celebrity communities. The platform also facilitates interaction among users.

Additionally, STAN allows gamers to collect, play, and trade digital assets, including non-fungible tokens (NFTs) tied to their favorite esports players and content creators. These NFTs provide opportunities to win both physical and virtual experiences, such as player meetups, esports boot camp tours, signed memorabilia, and social media shoutouts.

The startup has raised approximately $5.2 million across several funding rounds, with investors such as General Catalyst, Better Capital, Aptos Labs, Maelstrom Fund (founded by BitMEX co-founder Arthur Hayes), CoinDCX Ventures, and Coinswitch Ventures. Akshat Rathee also participated as a founding investor. Co-founder Shubham Gupta left the company in April 2024, according to his LinkedIn profile.

As of July 2024, STAN reported a user base of over 12 million, with more than 500,000 paying users. Its revenue for FY24 was approximately ₹15 crore, a significant rise from ₹1 crore in FY23.

STAN’s CEO, Parth Chadha, expressed optimism about the future, stating, "Nazara’s investment will greatly accelerate our efforts to revolutionize the gaming and esports communities and bring our vision to life."

Esports remains Nazara Technologies' largest revenue generator, contributing ₹131.9 crore in revenue during Q1 FY25, up 12% from ₹117.8 crore in Q1 FY24. This segment includes contributions from Nodwin Gaming and Absolute Sports, the owner of media brands Sportskeeda and Pro Football Network.

Nazara Technologies Ltd, a mobile gaming company based in India, operates across several segments including Telco subscriptions, Gamified early learning, Freemium, eSports, and Real money gaming. The company earns most of its revenue from the eSports segment, with a significant portion coming from the Asia-Pacific region.