Haryana-based Passion Gaming Pvt. Ltd, which owns RummyPassion.com, has divested a 51% stake to UK-based Stride Gaming Plc for $3.75 million (Rs 24 crore) in an all-cash deal.
The fresh capital will feed its working capital requirements to achieve faster growth, besides strengthening its marketing, technology and customer service teams to “capitalise on a rapidly growing market”, the company said in a press statement.
The transaction also gives Stride Gaming the right to appoint three directors on the startup’s board.
“Working with Stride Gaming places us in a strong position to bring international standards to the rapidly growing Indian gaming market, as we continue to focus on player acquisition, engagement and loyalty,” said Bobby Garg, founder and CEO of Passion Gaming.
Passion Gaming was launched in December 2015 by Garg, the former managing director of gaming company SoBe Finman. Garg is an MBA from the University of Maryland, College Park.
Eitan Boyd, the chief executive officer of Stride Gaming said: “We have been monitoring the Indian market for some time as we see strong dynamics in the current environment as well as long-term growth potential. Our UK market experience and proprietary technology advantage, combined with Passion Gaming’s market positioning and operational focus, creates a highly attractive proposition.”
Stride Gaming, which has a market cap of $228 million, is listed on AIM, the international market for smaller growing companies controlled by the London Stock Exchange. According to the company website, it has over 300 employees across the UK, Mauritius, Israel and South Africa, with its headquarters in London. For the year ended August, it had an annual revenue of $120.4 million.
Stride Gaming will have the right to acquire, at its sole discretion, the remaining 49% stake in Passion Gaming from existing shareholders over the next three to five years, using a combination of cash and shares, based on the future financial performance of the company.
Of late, the Indian rummy gaming industry has been getting foreign investor interest.
In April, Hyderabad-based game development company Head InfoTech India Pvt. Ltd, which operates online gaming firm Ace2Three, had raised $73.7 million (Rs 474 crore) in a fresh round led by Canadian private equity firm Clairvest Group.
The other major player in the segment is Tiger Global-backed Play Games24x7, which runs RummyCircle.
Like this report? Sign up for our daily newsletter to get our top reports.