Nazara Technologies buys majority stake in Indian adtech startup Datawrkz

Nazara Technologies, India's first listed gaming company, said it has agreed to buy 55 percent stake in Bengaluru-headquartered Datawrkz, as it leverages the advertising technology (adtech) firm’s capabilities to enhance its yield on ad monetisation of its large consumer base.

The gaming and sports media company will pay up to Rs 124 crore for the deal–its eleventh acquisition–which it expects to complete in two tranches. 

Nazara will pay Rs 60 crore – Rs 35 crore in cash and Rs 25 crore in cash or swap of shares – for a 33 percent stake in the first tranche, which it expects to complete by April this year. The gaming giant has the option to buy an additional 22 percent in the company, which it expects to close by the fourth quarter of the financial year 2023. 

“We, at Nazara, are looking to build strong gaming ad tech offerings globally with the partnership with Datawrkz,” said Manish Agarwal, CEO, Nazara. “Growth of gaming-focused adtech will be exponential in the coming decade across geographies with the growth of gamers and game publishers across freemium, Web 3.0 and skill-based real money gaming.”

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This is Nazara’s third major acquisition, after it went public in March 2021. It had acquired Hyderabad-based skill gaming company OpenPlay Technologies and also bought a majority stake in mobile game publishing agency Publishme last year. 

“Datawrkz' tech offerings will enhance in-house capabilities of Nazara for optimising its customer acquisition spends as well as enhance yields on ad monetization of its large consumer base,” the company said in a release. 

A global adtech firm with a presence in the US, Singapore and India, Datawrkz helps to drive user and revenue growth for clients through its optimised programmatic advertising and monetisation offering. The company was founded in 2013 by IIM Ahmedabad alumnus Senthil Govindan. 

The deal with Nazara values the company at Rs 225 crore (about $30million), based on its calendar year 2022 financials. The company reported a turnover of Rs 90.7 crore, up 136 percent over the previous year. It reported an EBITDA margin, which reflects an entity’s operating profit compared to its revenue, of 13 percent.

“Datawrkz was already on a fast track to achieve our objective with rapid growth and satisfied clients around the world. Through our partnership with Nazara, I see our pace accelerating further,” said Senthil.  

He added, “While Datawrkz will be able to immediately bring our natural strengths to bear within the existing Nazara fold, this also gives both sides a tremendous opportunity to build global advertising and publisher monetization products with a sharp focus on the gaming vertical.”

Nazara expects Datawrkz’s ad revenue monetisation to help companies in the ‘Friends of Nazara’ network where the gaming and esports platform holds a majority stake. These include Nodwin Gaming and SportsKeeda in esports; OpenPlay in skill gaming, Next Wave Multimedia which operates World Cricket Championship, and Paper Boat Apps, developers of the gamified learning platform Kiddopia.