MPL’s India biz turns break even; eyes global expansion

Yatti Soni Bengaluru | Updated on September 20, 2021

Sai Srinivas, co-founder, and CEO, MPL

Invests money primarily to bring in quality tech talent and currently employs over 800 across the globe.

India business of newly-minted gaming unicorn Mobile Premier League (MPL) has reached break even and is one of the reasons why the company feels confident in making global bets.

“We have this opportunity to build a global business because the India business has enough in it to sustain itself. Now, all our money is primarily invested towards bringing quality tech talent from all over the world to build a product that can cater to the rest of the world,” cofounder and CEO, Sai Srinivas told BusinessLine.

The gaming platform currently employs over 800 employees across Bengaluru, Pune, Jakarta, Singapore and New York. MPL is an esports platform which has worked with various game developers to on-board over 70 games on the platform. The games available on MPL are largely casual games such as Speed Chess, Fruit Chop, Pool, Ludo, Rummy, Fantasy cricket etc.

Fund raising

Earlier this week, the company announced its Series E round of funding from Legatum Capital at a pre-money valuation of $2.3 billion. Prior to this in February 2021, MPL had raised a $95 million Series D round at a post-money valuation of $945 million.

Srinivas attributed the growth in valuation to the investor community realising MPL’s potential to become a global company and the euphoria in the Indian startup ecosystem. He added that the company is focused on building a global platform and not valuations.

With the Series E funding, the company is doubling down on its US expansion plans. MPL was launched in the US earlier this year in July and going by the initial response, Srinivas expects the US market to surpass India in the next year and a half.

Launched in 2018 by Srinivas and Shubh Malhotra, the MPL’s major user base still comes from India and about 10-20 per cent of them are paying customers. Srinivas agrees that it is much harder to get a ₹10 out of an Indian customer than getting a $1 or 1 euro out of an American or European customer. However, the stickiness of Indian customers is much higher if they are offered a good customer experience.

“Even though ARPU (average revenue per user) in India might be less, the amount of people that we have in India is significantly larger. India is a country where the business objective has to be about making ₹10 from 500 million people. On the other hand, in some of these Western markets, even though we have a smaller audience, their paying capacity is much higher,” Srinivas added.

Indonesia experience

MPL has entered Indonesia two years back and claims to have about 700,000 to 1 million monthly paying customers in the country today. Overall, MPL has over 85 million registered users globally and on average, a user is estimated to play about 10 to 15 games on its platform.

“I'm not too worried about how much the Indonesian customers are paying or whether they are paying as much as the Indian or the US customers. The fact that there are 70,000 or a million monthly paying customers is a big deal for me. That means, I now have a distribution platform, on top of which I can put different kinds of games,” said Srinivas.

Regulatory ambiguity

In India, MPL competes with Dream11, WinZO, Paytm First Games, and BalleBaazi, among others. According to EY-All India Gaming Federation (AIGF) report, ‘Online gaming in India-The GST conundrum’, the Indian online gaming sector touched about $1 billion in 2020, and is expected to reach $2 billion by 2023 in terms of rake fees earned.

Online gaming in India has stayed in regulatory ambiguity for a while now. In the past, states like Telangana, Andhra Pradesh, Assam, Odisha, Nagaland and Sikkim have put a ban on online rummy. However, a similar ban did not pass in Tamil Nadu where the high court has held that online rummy involves high dominance of skills and thus cannot be considered as gambling.

Following various state regulations, online games operating in formats like online fantasy sports (OFS) and online rummy have had to prove skill predominance in their respective formats. While there are court precedents that have recognised OFS and online rummy as games of skill, the skill dominance in the game of Ludo is still being considered by the Bombay high court.

Commenting on the impact of the changing regulatory environment, Srinivas said that if one out of 70 games on the platform is banned in a certain state, MPL removes that one game in that state. He added that it is similar to how Netflix removes film titles if there's a ban in a certain country.

“We are very respectful of the regulations and in fact want these regulations to be in place. At the same time, we also work with the regulators closely to explain the nuances and advocate that all games cannot be clubbed under the same umbrella. But everything cannot be done overnight, it takes time. The recent developments, especially the Supreme Court ruling on fantasy sports and Madras High Court ruling are fantastic developments for the industry as they create the path for clear regulations,” he added.

Published on September 20, 2021

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