Mumbai-based game streaming platform Loco has raised USD 9 million from South Korean gaming company Krafton, the creator of PUBG, and Lumikai, an Indian gaming-focused VC fund. Hashed, Hiro Capital, North Base Media, Axilor Ventures, and 3One4 Capital also participated in this seed funding round. The startup will use the funds to upgrade its technology and content, the startup said on Monday in a media statement.
Loco was started as a live trivia game show app in 2017 by Abhishek Madhavan, Chetan Dembre, and Sushil Dembre. The trio sold it to Pocket Aces, a local digital media entertainment company, a year later. Under Pocket Aces, set up by Ashwin Suresh, Anirudh Pandita, and Aditi Shrivastava in 2013, Loco continued building and expanding its game streaming platform.
Last year, Loco began growing rapidly as millions of Indians flocked to gaming platforms while staying indoors due to the fear of COVID-19. According to the startup, its monthly active users rose 6x, and monthly active streamers increased 10x in 2020.
“Loco grew exponentially last year. It was a stand-out year for the company and the Indian gaming segment overall,” said Pranav Pai, founding partner, 3one4 Capital, told KrASIA. “Loco pulled ahead quickly and claimed the leadership position in game streaming in India.”
“They now stream 1,000 hours of content every day and continues to innovate to support format requests from the streamers,” he said. “And that is a very valuable asset.”
That is why many investors including Krafton became interested in Loco, Pai said. The new investors wanted Loco to be spun off as a new entity, given their interest in the gaming niche. The shareholders of Pocket Aces, including 3One4, agreed and wrote a seed check with the new backers. With the latest funding, the gaming platform has become a separate company.
Loco hosts the country’s best-known streamers playing popular games like Clash of Clans, FreeFire, and Call of Duty Mobile, aside from top esports teams and their tournaments. The company said it primarily competes with YouTube, as there aren’t many large game streaming platforms.
“The Indian gaming audience was increasingly hungry for a local platform that would serve them, their games, their community the way they want it,” Pai said.”Loco’s focus on localization has been a very important factor in its success.”
“The experience of gaming influencers has been sub-optimal on most global platforms. Indian gaming streamers do not always believe they are building a unique audience there,” believes Pai. “As India has many different languages as well as many emerging behaviors in each locale, the diversity that was being asked for by the game streamers, Loco has delivered it the best which has helped it built its credibility in the Indian gaming community.”
Pai said while the Indian market remains Loco’s priority, he expects the company to expand geographically.
“I don’t see Loco stopping with India; I see them expanding to other geographies like SEA by forging partnerships, Krafton being the first partners,” he said.
According to Salone Sehgal, general partner of Lumikai, given that over two-thirds of India’s millennials are gamers, India’s esports and streaming industry is set to grow at an average annual rate of 36% over the next three years.
“Cheap data and inexpensive phones have created the perfect situation in India, creating a completely new category of entertainment,” Pandita said in an interview with Bloomberg. “Over 100 million monthly active users in India engage with these games. Imagine 100 million people playing a sport that no one’s watching—that’s what Loco set out to solve for.”
The development comes at a time when Krafton has just released PUBG under a new name in the country, Battlegrounds Mobile India, which is made exclusively for Indian gamers. PUBG Mobile—among the top ten downloaded games last year in India—was banned in September 2020 by the government along with hundreds of other Chinese apps as it was distributed by Chinese internet giant Tencent. Aside from Loco, Krafton has also backed local e-sports platform Nodwin Gaming earlier in March, when it wrote the Gurugram-based firm a USD 22.4 million check.