The Man Behind India's Only Listed Gaming Company: Nitish Mittersain Up next, Nitish is looking forward to more acquisitions in the coming time

Having met him in Delhi before, which was pre-Covid to now in his office in Mumbai, you know few people stay the same and exude the same passion for business over the years. His office in the prominent downtown area of Mumbai doesn't radiate the same air you might expect out of people operating out of this space. He is calm, focused, and knows where he is heading the business with a sense of surety.

The man in question, Nitish Mittersain's office displays the same sense of old-world charm; he isn't the one in a race with gaming startups and unicorns of the world who will throw money at fancy leagues. For him, building a profitable business is the only way he knows how to do business. He's not the one who will go ahead with hire and fire mode and the one who will seek crazy valuations, he's the one who knows how to keep the business running behind all the glam that happens in the gaming business. Here's the man himself talking about building an ecosystem around gaming culture.

A SPARK IGNITED IN CHILDHOOD

Nitish's early years were anything but ordinary like other Indian families. "I was told I might never make it to college," he recalls. However, a gift from his father— a personal computer—changed everything. It was not just a toy for him, it became the canvas for his love and creativity in gaming. By the age of seven, he started coding games, driven by his curiosity and a knack for tinkering. He grew up in a family with a rich entrepreneurial background and was profoundly influenced by his grandfather. "He instilled a strong work ethic in me," Nitish recalls how he earned INR two rupees from polishing shoes. This early exposure to business principles fueled his vision. "Coming from a family of industrialists in the textile industry, I had a privileged background. This entrepreneurial mindset naturally extended to my passion for gaming, leading me to start coding and creating games," he shared.

"Despite the intense effort and excitement, the euphoria of the IPO's success lasted only briefly. As a founder, the immediate question was, "what's next?"

THE TEEN ENTREPRENEUR

At just 15, Nitish started his foray into the world of business. He created websites under Internet 3000 Technologies (3K). And, at the age of 19, he founded Nazara in 1998, a period which was marked by the Dotcom boom and subsequent crash. "I was 19 when we started Nazara, I was doing something even before that as well. I had another company where I was making websites for businesses," he recalls.

The dot-com crash also happened within two years, it was the toughest period for him and the company but it shaped the future for them and taught him valuable lessons i.e. the importance of profitability, cash flows, and long-term sustainable business practices.

"The dot-com crash was the toughest period in my career, yet also a tremendous learning experience. My mom wanted me to pursue an MBA in the US, but I believe I gained a more expensive and enriching education in Bombay. I was 21 when the crash happened in 2000, and we burned our fingers badly. At the time, my family business wasn't doing well, and we had taken significant loans to run Nazara. I found myself in debt, with creditors demanding INR three-four crores, equivalent to INR 20-30 crores today, with no source of revenue. Those years, from 2000 to 2002, were incredibly tough, but they shaped the company's philosophy. We became conservative, focused on real business, profitability, and cash flows, avoiding vanity metrics. These tough years instilled a debt-averse approach in us," he said.

MENTORS AND MILESTONES

Actor Shammi Kapoor, who was fascinated by technology, mentored him and provided him with a space for learning that was beyond the confines of traditional classroom practices.

"We were born before the dotcom. And my mentor used to be actor Shammi Kapoor, who I spent a lot of time with. I learned a lot of things from him and he also had an important role in how I developed my thinking in the early years. He was very passionate about computers and technology. In his house, he had created a den with three-four Macintosh. And I built a friendship with him. So I used to bunk my college and go to his house. Despite attending only eight lectures in five years at Sydenham College, this mentorship was instrumental," Nitish admits.

Cricket legend Sachin Tendulkar was another turning point in his career. In 2004, his company managed to secure Sachin's endorsement for a cricket game, opening doors with Airtel and generating significant media buzz. "In 2004, I aimed to return to gaming and struck a pivotal deal with Sachin Tendulkar. I wanted to provide games to Airtel, but as an unknown company, the telecom player wouldn't engage with me. Securing Sachin's endorsement led to a breakthrough with Airtel, as they had no choice but to work with us, fearing we might take the game to another operator," he recalls.

This partnership also led to an invitation from CNBC's Young Turks and caught the attention of investor Sandeep Singhal from Westbridge Capital. This was in 2004, and by 2005, the funding came through, diluting a significant portion of the company, i.e. INR six crores for 40 per cent.

"Rakesh Jhunjhunwala was impressed by how we had built the company with minimal capital, raising only 12 crores by then, and our focus on profitability and cash flow. He appreciated that we had a sustainable business model, unlike many new-age companies burning cash."

"The announcement of the Sachin deal generated significant media publicity. The interview aired in 2004, catching the attention of Sandeep Singhal from Westbridge. Sandeep, intrigued by the interview, reached out to me. At that time, Westbridge was launching its first fund of 130 million dollars. After six to nine months of discussions, we finalized their investment in Nazara. I vividly remember visiting their Bangalore office, marking the beginning of a significant partnership. It felt like a Shark Tank deal, but I have no regrets," he recalls.

NAZARA'S TELCO SUCCESS MODEL

By 2014, Nazara had mastered the telco monetization model, achieving profitability and expanding into 50 countries. The business model was like a subscription-based gaming channel for telcos, much like a Netflix for gaming. The company made a remarkable profit of INR 250 crores in 2014. "Over the next few years, we found our footing and discovered that telco monetization was highly effective. Innovating in this area, we established a successful model in India between 2007 and 2009, which we then replicated in 50 countries, including Sri Lanka, Africa, and the Middle East, from 2009 to 2014. Running the business lean and mean, we remained profitable and cash flow-focused. From an initial fund of INR 12 crores, we had accumulated INR 250 crores in profits after tax," he added.

THE ORIGINAL DREAM

By 2014-15, Nitish wanted to return to the original dream of expanding into multiple genres of gaming. Back then the Indian market had already evolved significantly, with widespread mobile phone usage, better data access, and the rise of digital payments. This was the time and the market boom reminded him of his original dream and presented a prime opportunity to revisit and expand his gaming ambitions.

"While we had focused on telco-based gaming, it was clear that the potential for gaming was much larger. Around this time, I conceived the "Friends of Nazara" strategy. I recognized that there were many talented individuals in the gaming industry, and partnering with them could create a synergy greater than the sum of its parts. This strategy involved investing in their companies, taking a majority stake, but allowing the passionate founders to continue running their ventures with our support. This approach allowed us to leverage the expertise and enthusiasm of various founders while providing them with capital and strategic guidance. This "House of Brands" model helped us manage multiple ventures effectively. It allowed us to maintain the founders' independence and passion while benefiting from a decentralized structure, similar to Berkshire Hathaway. This pivot in 2015-16 laid the foundation for our growth and success," said Nitish. Further pointing to acquisitions like Sportskeeda and H2O, he shared, "We began acquiring companies in different areas of gaming, including e-sports and sports content which owns the WCC franchise."

TRIUMPH IN THE FIRST IPO

The decision to go public in 2021 marked a significant milestone. Nazara had the backing of Rakesh Jhunjhunwala, who invested INR 200 crores, not directly in the company but by buying Westbridge's stake. "Jhunjhunwala was impressed by how we had built the company with minimal capital, raising only 12 crores by then, and our focus on profitability and cash flow. He appreciated that we had a sustainable business model, unlike many new-age companies burning cash. Rakesh Jhunjhunwala not only invested in Nazara Technologies but also took a personal interest in the business. He would call me at least once a month to discuss our progress and offer advice. His family still holds 10 percent of the company, and they have never sold a single share since his investment. This has been a testament to their belief in Nazara's potential," he said.

Nazara's IPO was one of the most subscribed, achieving 170 times oversubscription. "Despite the intense effort and excitement, the euphoria of the IPO's success lasted only briefly. As a founder, the immediate question was, "What's next?". The responsibility towards shareholders and meeting quarterly targets became the new focus," he further added.

Post-IPO, Nazara continued to thrive. Revenues grew from INR 450 crores in 2021 to INR 1100 crores by 2024, with an EBITDA of INR 128 crores. "What makes me particularly proud is our positive cash flow; this year, we generated INR 131 crores in cash from operations, surpassing our EBITDA." Nazara's recent success in raising nearly INR 950 crores, including a substantial investment from the State Bank of India, underscores the company's robust position in the market.

THE ANGEL

Just like the way other investors helped Nazara to rise, Nistish has invested in close to 90 companies as an angel investor. Talking about his investment thesis, he says, "Things are changing so fast. When you interact with these founders, you learn from them. It's not just them thinking they will learn from you. They are founders born in today's world. I believe that Indian startup investments will be the highest returning asset class in the world for the next 10 years."

Up next, Nitish is looking forward to more acquisitions in the coming time. Talking about the recent stake sale by the founder, he says, "We sold a six percent stake. We as a promoter family spent 25 years in this business with very little liquidity because a lot of our dilution happened in the early days. Ten percent may sound low but in terms of absolute terms in today's market cap, it is INR 600 crores, which is my largest investment. There's nothing else I can do in my life that can take INR 600 crores to that kind of magnitude."