Mayhem Studios, Raises $20M in Series A Funding Led by Sequoia Capital India

• ByStartup Story Team     |    April 11, 2023

Mayhem Studios, the mobile game development arm of gaming unicorn MPL, has successfully raised $20 million in its Series A funding round, led by Sequoia Capital India. Steadview Capital, Truecaller, and other investors also participated in the round. Notably, Bing Gordon, Chief Product Officer at Kleiner Perkins, also joined the round in his personal capacity. 

As per a source familiar with the matter, Mayhem Studios reportedly shared news of its successful funding round with its employees during a recent town hall meeting. The source revealed that the company plans to utilize the raised funds to enhance its capabilities and develop new games within India. Notably, Sequoia Capital India, which led the funding round, is also an investor in MPL, the parent company of Mayhem Studios. Mayhem Studios, launched in May 2022, focuses on developing AAA mobile games and has already released its first gaming title shortly after its establishment. The studio competes with other players in the market such as Dream Game Studios, a subsidiary of Dream11, and Nazara Technologies.

MPL, founded in 2018 by Sai Srinivas and Shubh Malhotra, is a popular gaming startup that offers a wide range of gaming options, including skill-based games like daily fantasy sports and chess, as well as casual games like 8 Ball Pool and Fruit Ninja. The company recently raised $150 million in a unicorn round in September 2021. In addition to its existing gaming offerings, MPL has also ventured into the Web3 gaming space, launching the NFT marketplace Good Game Exchange (GGX) last month to tap into the emerging play-to-earn gaming sector.

 

The recent funding round of Mayhem Studios, the mobile game development arm of MPL, comes at a time when the Indian government has notified rules for online gaming and introduced a self-regulatory framework to certify online games as permissible or non-permissible. According to the institutional framework, online games in India will be classified as permissible or non-permissible by self-regulatory organizations (SROs), and there will be multiple SROs in place. MPL’s CEO and co-founder, Srinivas, expressed confidence that the uniform legal framework provided by these rules will enhance investor confidence. He also appreciated the differentiation made between online gaming and gambling.

The online gaming industry in India may receive potential relief as the Group of Ministers (GoM) is considering recommending an 18% tax on gross gaming revenue (GGR), instead of the earlier proposed uniform GST of 28%. Furthermore, the GoM is expected to differentiate between games of skill and games of chance, a demand that the industry has been making for a long time. However, the Finance Bill currently imposes a 30% tax on any prize money earned by customers in online gaming, resulting in uncertainty regarding taxation in the industry. Although online gaming norms have brought some legal clarity, the industry is still awaiting clarity on taxation.

According to a report, India’s gaming market was estimated to be $2.6 billion in FY22 and is predicted to reach $8.6 billion by FY27. The number of gamers in India stood at 507 million in FY22, growing at a compound annual growth rate (CAGR) of 12% from 450 million in FY21.

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