PUBG publisher KRAFTON to invest in Web3, deeptech start-ups

After investing around $100 million in Indian start-ups over the past year, PUBG publisher KRAFTON is now expanding its investment thesis to include sectors like Web3 and deeptech, as well as gaming.

Activity area spoke with Anuj Tandon, Head of Business Development, India and MENA at KRAFTON, about their investment thesis and this year’s India investment plan.

Why does a game company like KRAFTON invest in dating apps (FRND) and storytelling platforms (Pratilipi, KUKU FM)? How does this fit into your investment thesis?

We believe that there is a large white space in the interactive entertainment industry in India which includes video games, e-sports and technology platforms stretching across the entire media and entertainment industry. We see that there are underfunded businesses in media and entertainment in particular and we also see many strategic synergies. So we were kind of opportunistic about it.

For example, when you talk about FRND, dating is the second kind of in-app transaction apps in India. Since our games are already monetized, there is a lot of operational knowledge and benefits that we can bring to a company like FRND, which is at the start of this monetization journey. There’s kind of a synergy that way and also we acquired Between, which is a social messaging app for couples. So there’s a certain strategic synergy that way.

KRAFTON is also one of the most powerful IP companies in the world in terms of the gaming landscape. When we talk about intellectual property, it takes many forms. Last year, we announced a partnership with a Netflix director for a series on our IPs. There’s a lot of pan-entertainment IP penetration happening, with gaming companies and entertainment companies coming together. In the case of our investments in Pratilipi, Kuku FM — we support platforms that develop IP discovery. That’s our whole strategy there.

Do you see these IP addresses converting into games one day?

Potentially, yes. But we’re not just thinking about games here. We want to support these companies because we have seen how in Korea an IP like a squid game can change the life of a production company or an IP company. We’ve seen platforms such as webtoons, whose IP addresses are now turned into Netflix shows, among other examples. So all of these platforms are going to be a long-term creative engine for transmedia IP, which includes games, streaming shows, comics, and audio platforms. This is how we see the world shaping up, we saw it happening in Korea, we see it happening in India sooner rather than later.

Have you planned an investment amount for the Indian market this year?

In 13 months of active investment, we have deployed approximately $100 million in India. And that’s not it, this year, we want to go beyond that number. We are happy to invest much more than that, if needed. So there is no end point for us if the right opportunity arises. We’ve written checks for $5 million to $45 million, depending on the occasion. If we have the right opportunity, we are happy to write bigger checks. We are stage agnostic, investing in series A, B, C and even D.

Specific sectors in which you would invest?

This year, our thesis is a little broader. The game is basically our heart, we will continue to find the right opportunity in this space. For other sectors like media and entertainment, we will focus on things like deeptech and AI. We plan to invest more deeply in technology and AI this year. In addition, at the level of the global organization, we focus very closely on the web3. That doesn’t mean we’re going all out and investing in everything web3. There must once again be the strategic synergy of what can be built with these companies.

Web3 investments are going to be about how we can take advantage of NFTs and what our contribution to creating the metaverse can be. As a games company, our main thesis is to create fun, so that’s always going to be there and web3 is just another way for consumers to connect with us in that aspect.

Published on

April 15, 2022