As gaming, short-form video apps and digital video platforms clock a rise in both userbase as well as time spent, the media technology (media-tech) space gets renewed interest from investors. Funding in the media-tech sector recorded a 212.9% rise to $2.1 billion in CY2021 as compared to $671.1 million in CY2020, according to data provided by Tracxn Technologies. The sector has raised a total of $1.2 billion in CY2022, till June. “The pandemic-induced lockdown gave a tremendous boost to the media and entertainment industry. It accelerated the growth of digitisation across India and the adoption of online content, especially short-form. Additionally, regulatory changes in mid-2020 created a level playing field for homegrown companies, thereby increasing investor activities in the sector,” Manohar Singh Charan, chief financial officer, ShareChat and Moj, told BrandWagon Online.
As per the latest FICCI-EY report, the Indian media and entertainment (M&E) industry clocked Rs 1.61 lakh crore in 2021 and is estimated to grow at a CAGR of 11% to Rs 2.32 lakh crore by 2024. Of this, digital media grew the most at Rs 6,800 crore and increased its contribution to the M&E sector from 16% in 2019 to 19% in 2021. Media-tech space includes short-form video apps, digital short video news provider apps, game streaming apps, digital audio apps, among others. For industry experts, media as a space has undergone a drastic change in the past couple of years from television to now digital. “In the past, media industry was dominated by cable TV with content catering to the masses. Now, content format, personalisation and interactivity with viewers has gained prominence. At one time, digital used to account for 15-20% of total ad spends, I expect TV to be in the spot soon,” Anirudh Pandita, founder, Loco, stated.
For media-tech firms, the fund raised by them has primarily been directed towards technology to enhance user experience. As for game streaming company Loco, which raised $42 million this year (March), the fresh funds will be diverted towards building and enhancing technology, investing in new content and building features on the app for the gaming community. Similarly, short-form video app Chingari claims that their funding has also been diverted towards technology along with marketing. “Almost 60% of our funds have been invested in enhancing our user experience and technological advancements while the other 40% is invested in hiring tech and media experts who have helped the development of the platform, as well as for marketing spends to increase the awareness around $GARI Social Tokens and the GARI Mining reward program,” Deepak Salvi, COO and co-founder, Chingari App, elaborated.
The data from Tracxn also revealed some of the top investors in the sector. These include Accel (invested in Koo app), 3one4 Capital (Loco, Koo app), 9Unicorns (MemeChat, Tamasha), IPV (Hoopr, Mentza), among others, in CY2021. Meanwhile, top investors in CY2022 are Hashed, Lumikai, ah! Ventures, IPV, Y Combinator, Accel, Orios Venture Partners, among others till June. Top funded companies in CY2022 are VerSe, ShareChat, Pocket FM, Chingari, among others.
While the industry continues to grow at a fast pace, industry stakeholders believe that the ushering of Web3.0 will further accelerate the industry’s growth. For Charan, technological advancements are creating a new media environment coupled with improving internet infrastructure, like the advent of 5G technologies.
Echoing the sentiment, Salvi believes that NFTs have a great potential to offer to the media and entertainment industry. “For creators and artists NFT marketplaces are a great platform to mint NFT and monetise it. For brand marketers, the rise of NFTs brings new possibilities in the realms of digital goods, digital media distribution, and access management,” he said adding that gaming technologies are also laying the foundation for a new interactive layer for the media tech industry, that would eventually evolve into the adaption of metaverse.