Why We Invested In HighXP
HighXP is our first investment in the gaming space. HighXP is building in the social casual space. Their first game – Doodle Me is available on the App Store and Play Store. We feel this is the right time for India to build world class global gaming studios. Build in India for the world.
Why we are excited about the casual gaming space
We have been bullish on the casual gaming space in particular for multiple reasons – game development time is low compared to mid-core & hard core genres. Casual games offer much higher retention rates as compared to hyper-casual games. If a game becomes popular, it typically runs for 5–10 years with >40% gross margins making it a hugely cash positive business for the studio. A perfect example of this could be Good Job Games, a casual gaming studio which had a topline of USD 200K and upon launch of Zen Match, which became a success, topline grew to USD 5.0 mn a month.
Casual gaming space is also very M&A focused, cash rich global gaming studios are always looking to increase their revenue streams through inorganic acquisitions and get popular games under their banner.
(from L to R: Shankara, Adith, Kamini and Raghu)
The India Story
Majority of the gaming studios have come from North America. But in the casual space, Turkey is leading the space and is known as the world leader of casual games. A small country like Turkey has 400+ gaming startups whereas a country like India is lagging behind. With access to a world class talent pool, capital and technical expertise, India has the right ecosystem to build world class products and scale them globally. Macro tailwinds such as new monetization measures, having a large and growing target audience with a digitally adept user base sets the precedent for high growth in this segment both domestically and scaling globally. We feel this is the SaaS moment in Gaming for India.
Founder Market Fit
Shankara and Raghu have a combined experience of 18+ years in the field of gaming having been part of 20+ mobile phone games. Being engineers first and then handling the P&L side of things puts them in a unique position with a deep understanding of the gaming business. Both of them have strong experience in live-ops, which is essential for longevity & scalability of the game – Casual gaming is similar to a TV series business rather than a movie production business – hence the experience of LiveOps is very critical in the team.
The two founders have shared a great camaraderie over the years having worked together in leadership positions at Zynga & Big Viking Games. They have led game development & built tech teams from scratch. Gaming business is highly metrics driven with globally established playbooks. We believe it is important to back founders who have done this before so that the learning curve is minimum.
We are proud to back HighXP and continue to support Raghu & Shankara and their team in this journey of building a global casual gaming studio from India.
If you are building a gaming startup, we would love to hear from you.
Please reach out to us on deal@gembacapital.in
If you are looking to join HighXP, yes they have raised US$2.2Mn – please reach out to them at careers@highxp.in
