While startups in the fintech and B2B commerce space continue to attract strong deal flows, multi-stage venture capital firm Lightspeed sees a large opportunity in the gaming sector, where India has a real opportunity to build mid-core games for the world.
“Within consumer tech, I think gaming is a real opportunity. We are seeing gamers across age groups, and even female gamers coming online in a big way, which hasn’t happened historically. We are seeing in-app payments growing at a rapid pace due to microtransactions. So, gaming is just poised for scale in the country,” Harsha Kumar, partner at Lightspeed India, told FE.
“I think the opportunity to build a true mid-core game out of India is a very real one. Using AI (artificial intelligence) to build more interesting games is a real opportunity too, while I’m also excited about something in the metaverse space,” she added.
Mid-core games are more complex than casual and hyper-casual games and require time and strategy to play, but are less intensive than hardcore games.
A few examples of popular mid-core games include Clash of Clans, Genshin Impact and Free Fire.
Lightspeed recently led the second $100-million funding round of this year for audio series platform Pocket FM, which the firm has been backing since the seed rounds. The platform offers serialised audio fiction that is filling the gap in passive content consumption left behind by music and podcasts.
“An average Pocket FM user listens to their series for two hours a day. That’s a lot. And that’s because PocketFM has innovated with a new entertainment format in audio. PocketFM’s serialized fictional content serves a need that music or podcasts or audiobooks do not serve,” Kumar said, adding that a microtransaction model works well for young platforms such as Pocket FM, where the content density is low and scaling will take time.
Besides gaming, Kumar is highly bullish on the fintech industry, where she expects to see more opportunities open up in the lending, wealth and insurance spaces. The firm has backed startups such as Byju’s, Udaan, Oyo, Acko, Sarvam AI, Sharechat, Razorpay and more.
“My broad thesis on fintech is that in any developing market, you will first see payments take off. When there is digital payments, that’s when lending takes off because you need data for lending to scale. And then if there’s enough capital available for businesses, you see wealth creation which fuels the growth of wealth management platforms. Once there is sufficient wealth creation, consumers think of preservation and that’s when insurance takes off,” she said.