Xiaomi founder's Shunwei Capital invests $5 mn in Indian gaming startup

India overtook the US to become the world's second-largest smartphone market, reports Tech In Asia

Mobile gaming is yet to take off in India like it has in China. But investors from across the border clearly see the potential for it in the world’s second-largest smartphone market.

Shunwei Capital, founded by Xiaomi boss Lei Jun, today led a series An investment of US$5 million along with Accel Partners in Bangalore-based gaming startup Mech Mocha. Early investor Blume Ventures also participated in the round.

Monetisation has been hard so far in the Indian market with online consumers being reluctant spenders. But there’s been a surge in downloads of games, with India climbing to fifth globally in tandem with the ongoing smartphone boom. Last year, India overtook the US to become the world’s second largest smartphone market with over 300 million active users.

These numbers coupled with a GDP growth rate of over 7 percent hold out hope for game publishers and investors. The expectation is that a tipping point will come when spending power increases like it did in China. “Mech Mocha is an example of a solid team in a market that is yet to explode,” says Karthik Reddy of Blume Ventures, who invested in the startup’s seed round of US$1 million in 2015, along with Indian e-commerce site Flipkart.

Founded by tech graduates Arpita Kapoor, Mohit Rangaraju, and Shilp Gupta, Mech Mocha claims its first India-focused game – Chhota Bheem Himalayan – has 4 million players and good rankings in Google Play. The team of 30 artists and engineers previously worked at American gaming companies like Electronic Arts, Zynga, Disney, and Dreamworks. The challenge is monetization – it’s early days in that respect for Indian gaming companies, with the top-grossing game publishers being from the US, Europe, China, and Japan. This is an excerpt from Tech In Asia. You can read the full article here.