WinZO earmarks $25 million investment in Brazil for expansion | Mint
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Business News/ Companies / News/  WinZO earmarks $25 million investment in Brazil for expansion
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WinZO earmarks $25 million investment in Brazil for expansion

The vernacular social gaming platform, which has so far raised close to $100 million, is going to deploy the funds in the Latin American country amid high taxation in India

WinZO will invest $25 million to expand and build in the Brazilian gaming market.Premium
WinZO will invest $25 million to expand and build in the Brazilian gaming market.

Mumbai: WinZO Games, the Indian vernacular social gaming platform with over 150 million users, is set to launch its platform in Brazil and has earmarked an investment of $25 million in the Latin American country.

The move comes at a time when the Indian gaming ecosystem is facing an existential threat imposed by a 400% hike in the Goods and Services Tax (GST), which has resulted in the tax authorities sending out tax notices worth over 1.5 trillion to these companies.

While WinZO has not received any such notice yet, the company is expediting its plans for international expansion.

“Brazil is a very interesting market. Almost 98% of the local population actually consumes in Portuguese. Brazil is actually where India was in 2017. So they have just recently started Pix, which is similar to UPI phenomena where micro-transactions and payments are getting solved," Saumya Singh Rathore, co-founder, WinZO Games, told Mint.

“It is also the fourth largest market globally, for interactive entertainment and the regulations and taxation both with regards to online gaming are favourable."

The company, which has over 100 game developers as its partners and has popular casual games such as carrom, chess, car racing, among others, on its platform, will also allow its partners to offer games directly in the new market. During its beta testing, the company has seen great interest in Ludo, Rathore shared.

"The market is underserved with very few products catering to Portuguese market. We are planning to solve for the underserved market, as we did here in India. During our beta stage, Ludo became very popular there and we are looking at introducing many more games in the market," she said.

The company said that Brazil has 90 million gaming users and in 2022, they downloaded 4.6 billion mobile games.

Rathore added that WinZO will provide access to the Indian game developers to the new market and users without any cost of technology, marketing, and distribution. The company will invest $25 million to expand and build in the Brazilian gaming market, which will allow further growth opportunities for the export of computing, technology, and consumer tech from India.

"We have raised close to $100 million over the years, and while a substantial amount is invested in India, we have enough cash and will deploy $25 million in Brazil," she said.

India and Brazil, both members of BRICS, have a shared objective of enhancing cooperation and trade among member countries and WinZO’s expansion into Brazil aims to build upon this collaboration by extending it to the realm of technology, the company said. 

This expansion will contribute to the development of peripheral sectors such as payments, and the gig economy, and the creator economy of Brazil while also creating significant employment opportunities.

Taxation rates globally, including countries such as the United States, the United Kingdom, Australia, and Germany, are applied to the commissions for casual games of skill that are treated differently from fantasy sports. They levy tax rates of 6.75%, 21%, and 19% on commission fees. Brazil levies indirect taxes such as 2-5% as municipal tax, applicable to the commission earned by the company.

This month, WinZO will also launch and represent the first-ever India Pavilion at the Brazil Game Show, the largest gaming show in Latin America. This will enable the representation of game developers from India to the global gaming ecosystem and showcase their games to a global audience, it said. The company plans to further expand its collaborations with game developers, to export their games to the world's remotest corners.

Mint had earlier reported that companies like Games 24x7, MPL and Nazara Technologies were planning to expand into international markets with casual games or e-sports, respectively. Some were looking at the North American market, while others had their eyes set on the key markets in Southeast Asia and Latin America.

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ABOUT THE AUTHOR
Gaurav Laghate
Gaurav Laghate is the chief of Mint's Consumer Bureau that covers FMCG, consumer durables, retail, media, advertising, hospitality, luxury and the business of sports. An accomplished business journalist with a career spanning over 15 years, he has reported on the significant advancements in the media and entertainment industry, as well as the business of sports. Beyond his role as a journalist, Gaurav is recognised as a steadfast observer of the media landscape, having spoken at several industry events and panels.
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Published: 05 Oct 2023, 12:27 PM IST
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