Krafton hikes India bet with new $670M fund

Krafton, the South Korean gaming powerhouse renowned for popular titles like PUBG and Battlegrounds Mobile India (BGMI), is intensifying its investment strategy in India by launching a new growth fund. Named the Unicorn Growth Fund, this initiative is a partnership with South Korean internet giant Naver and investor Mirae Asset, aimed at tapping into the vast potential of the Indian market, which boasts the largest user base for the internet globally. The fund is set to deploy up to ₹60 billion, approximately $669.3 million, over a four-year period. Krafton has confirmed to TechCrunch that the fund will be managed by Mirae Asset Venture India, with plans for establishment in January. Initially, the fund will kick off with over ₹30 billion, or around $334.6 million, with Krafton committing ₹12.3 billion, roughly $137.2 million, at the first close. Naver is expected to match this investment closely, as indicated by a Krafton spokesperson. Unlike traditional funds, the Unicorn Growth Fund will not impose strict geographical limits on its investments. The typical investment range is projected to be between $10 million and $30 million. Krafton has stated that these investments will primarily be viewed as financial opportunities rather than strategic endeavors, although the level of engagement with portfolio companies may vary depending on their potential and the unique opportunities they present. To date, Krafton has invested over $200 million in India, supporting a diverse range of companies across the gaming, content, and fintech sectors. Recent funding rounds have included investments in fintech firm Cashfree and venture fund IMM Investment, alongside earlier support for gaming and content platforms like Nodwin Gaming, Loco, Pratilipi, and Kuku FM. In addition, Krafton introduced a gaming incubator in India in 2023 and acquired a controlling stake in Indian studio Nautilus Mobile for $14 million earlier this year. However, Krafton's journey in India has not been without challenges. In 2022, the Indian government banned BGMI, its flagship title tailored for local audiences, but the game was allowed to resume operations in 2023 after a brief trial period. Following this, the company announced a $150 million investment commitment to the region. BGMI, which has now surpassed 240 million downloads, was launched in 2021 as a redesigned version of PUBG Mobile, which faced a ban in India in mid-2020 due to national security issues. In response to regulatory concerns, Krafton has implemented several operational adjustments, including severing its publishing ties with Tencent and migrating its Indian servers to Microsoft’s Azure cloud. With the establishment of this new fund, Krafton aims to broaden its investment strategy in India beyond gaming, directing capital towards a wider array of technology startups as it seeks to solidify its long-term presence in one of Asia's most rapidly expanding digital markets.