Rooter raises ₹131 crore in growth round led by Lightbox

Mumbai: Homegrown gaming and e-sports content platform Rooter has raised ₹131 crore ($16 million) in a growth round led by its existing lead investor, Lightbox. The round also saw participation from new investors including Trifecta Capital, Pivot Ventures, Baldota Family Office, Global Play Media, Denlow Private Trust, Venture Catalysts, and Potential Ventures.

Existing investors such as Duane Park Ventures, LeAD Sports & Health Tech Partners, ADvantage VC, Goal Ventures, Capital A, and Astarc Ventures also participated in the round.

The company has so far raised a total of $30 million, of which $25 million came in the last round, which also included $8 million in secondary funding, providing an exit to 21 early investors.

Founded in 2016 by Piyush Kumar and Dipesh Aggarwal, Rooter aims to achieve three times revenue growth and profitability by April 2024.

Piyush Kumar, founder and CEO of Rooter, expressed confidence in the company's monetization model, saying, "Our revenue has grown 4 times in the last 12 months. Today, our revenue is approximately $7 million ARR, which is almost $550,000 per month. But this revenue will cross $10 million in the next three to four months. We have a clear path to profitability now, and I can confidently say that Rooter will be a profitable company on or before April 2024."

Rooter recently achieved a significant milestone by becoming the first gaming content platform in India to surpass 50 million downloads on the Google Play store. The company plans to utilize the newly raised funds to enhance its technology capabilities, improve its product offerings, and elevate the user experience on its platform. Additionally, Rooter intends to explore market expansion opportunities and potential strategic acquisitions.

“In India's fast-growing gaming content space, Rooter has set strong benchmarks. We are confident in the ecosystem they are building around game streaming and esports and look forward to supporting them in their mission to become the largest mobile-based gaming content and streaming platform in the world," said Sid Talwar, partner at Lightbox.

Abhishek Gupta, partner at Trifecta Capital, expressed enthusiasm about joining Rooter during this critical phase of growth, emphasizing the company's capability to deliver results and stay ahead of the market. 

Rooter has plans to expand its presence in South East Asia and the MENA region in the future. The company also aims to identify technology partners that can enhance its ecosystem capabilities on a large scale. While focusing on India's growing creator ecosystem and collaborating with top e-sports teams, gaming content creators, and brands, Rooter strives to further establish itself as one of the fastest-growing content categories in the country.

“As the largest player in the industry, we will continue to invest in creators and e-sports teams, but we are also looking at rationalizing that investment. We are basically looking to now make every relationship in a manner that monetization is a very important decision maker,” Kumar added.

He said that Rooter currently works with 75 to 80 brands on average in a month, providing them with multiple solutions for brands to target gamers, including advertising, performance marketing, content, IP, Esports, sponsorships, and influencer marketing.

"We are now working with all the top brands across categories to help them reach out to gamers because we are the only platform currently in the market besides YouTube and Facebook that provide direct advertising and brand collaboration solutions for targeting gamers, which is the most sought after target audience right now,” he said.

However, with a revenue distribution of approximately 90% from brands and 10% from users, Rooter aims to substantially increase user revenue as it scales its revenues threefold in the next 12 months.

“We have monetised users for the last twelve months through Rooter Stores, where users can make in-app purchases. In the next twelve months, our key objective is to scale up user revenue through a number of commerce activities. We want to increase the contribution of user revenue significantly to our overall revenue currently which is being driven by brands. So the idea is that user revenue should also contribute quite a decent amount.”

He also claimed that Rooter’s revenue comes at 80% gross margin, which is why investors continue to back the company, or somebody like Trifecta came on board during the tough market conditions. “Because it is one thing about just making a top line, but to have a very strong bottom line is what makes a company really sustainable. And for us that is the path to profitability,” he said.