Nazara Technologies Acquires 60% Stake in Funky Monkeys to Expand into Physical Entertainment

Nazara Technologies makes its foray into the physical entertainment space by acquiring 60% stake in Funky Monkeys for Rs 43.7 crore. The entire deal is an all-cash transaction. The company was set up in 2012 by two founders, Binita Putcha and Sanjay Ghadiali, and has indoor soft play games and entertainment setups mainly for kids aged between 1 to 12 years old. The company now has 11 centers all across India, including Mumbai, Pune, Bengaluru, Surat, Ahmedabad, Amritsar, and Chennai.

As of March 31, 2024 (FY 2023-24), Funky Monkeys reported a turnover of Rs 19.4 crore against Rs 17.2 crore during FY 2022-23. The company's net profit or EBITDA for the fiscal year stood at Rs 4.2 crore, down slightly from Rs 4.3 crore in the previous year. Major revenue drivers for the company include birthday parties, events, walk-ins, food, and beverages.

Following the acquisition, Nazara Technologies said on December 2 that it seeks to build an integrated ecosystem of digital and physical gaming, thus offering a full entertainment value proposition to the youth. The company also noted that Funky Monkeys has significant growth potential, especially pertaining to its expansion in Tier 2 cities and smaller towns. 

With all of Nazara's knowhow and resources, we have good faith that we can really scale Funky Monkeys and bring even more joy to children and families across this great country. We also see synergies with digital IPs owned by Nazara such as Kiddopia and will work to maximise these opportunities,” said Funky Monkeys co-founders Putcha and Ghadiali in a joint statement.

In August, Nazara Technologies received a letter of intent to acquire Smaaash Entertainment, a sports entertainment company backed by Sachin Tendulkar, through insolvency and bankruptcy proceedings. Smaaash, which operates approximately 13 entertainment centers across India, was admitted to bankruptcy in May 2022.

Nazara's first AI investment

Nazara Technologies, India’s first publicly listed gaming company, also announced its maiden investment in the artificial intelligence (AI) sector. The company is investing Rs 4.17 crore in Learntube.ai (formerly CareerNinja), an AI-driven personalized learning platform, in exchange for a 4.68 percent stake.

Founded in 2017 by Shronit Ladhani, Learntube combines gamification with personalized education to create an engaging and interactive learning experience for professionals. The platform offers goal-oriented learning paths and one-on-one AI coaching.

Learntube analyzes users' LinkedIn profiles, maps their skills, and designs customized syllabi to meet their learning needs. The platform also offers certified courses in partnership with organizations such as Canva, Zoho, Hootsuite, and Wipro. The startup reported a turnover of Rs 1.41 crore in FY 2023-24, up from Rs 0.25 crore in FY 2022-23.

"LearnTube’s collaboration with Nazara is a bold step forward in reshaping professional learning and interactive media. We are excited to combine forces to lead innovation on a global scale," Ladhani said in a statement.

More funds in Nodwin Gaming, Sportskeeda, and Datawrkz

Nazara invests Rs 64 crore in its sister esports-company Nodwin Gaming to advance global operations. The money will enable Nodwin Gaming to invest in improving capabilities, expanding IPs, and strengthening emerging market presence, said the company.

Nodwin Gaming acquired Trinity Gaming for Rs 24 crores in November. For building content for online streaming platforms, Trinity is in collaboration with more than 1000 creators working on YouTube and Facebook. Founded in 2019 by Abhishek Aggarwal and Shivam Rao, it marks its place in the best brands like Samsung, Realme, iQOO, and Krafton for content creation, digital marketing, and event management.

With the rest of its businesses under its own verticals, Nodwin Gaming aims to take the Trinity portfolio to growth markets like Africa, Southeast Asia, Central Asia, and the Middle East. The company will also merge its Unpaused Talent business with Trinity, which will be managed by Aggarwal and Rao.

Additionally, Nazara is investing Rs 69.17 crore into Absolute Sports, its subsidiary that runs sports media brands Sportskeeda and Pro Football Network. This investment will fund the secondary acquisition of 18,330 shares resulting from the exercise of ESOPs by the Sportskeeda management. Following the transaction, Nazara will own 100 percent of Absolute Sports, making it a wholly owned subsidiary.

As part of this deal, Absolute Sports CEO Ajay Pratap Singh will receive Rs 24.35 crore for selling 6,500 equity shares.

The company’s board has also granted in-principle approval for an infusion of Rs 15 crore into its advertising business, Datawrkz.

"Nazara is committed to building India’s largest diversified gaming and entertainment platform, and many of the initiatives announced today are aimed at driving profitable growth in our strategic areas of focus," said Nitish Mittersain, founder of Nazara, in a statement.

In November, Nazara concluded a Rs 855-crore funding round, which saw participation from both existing and new investors, including SBI Mutual Fund, CaratLane co-founder Mithun Sacheti and his brother Siddharth Sacheti, and Plutus Wealth associate Junomoneta Finsol.