Indian Game Streaming Startup Loco Sells Majority Stake to Investment Firm Redwood

Redwood, a newly formed investment firm based in the UAE, has acquired a majority stake in the game streaming platform Loco, as the Indian startup looks to expand its focus to international markets. This development comes on the back of a $65 million deal signed between Redwood and Loco, which also provides full exit to all existing backers of the company.

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A Significant Valuation Drop for Loco

The valuation of Loco has taken a hit, with the company’s worth now estimated at around $85 million. This figure is significantly lower than its peak valuation of nearly $150 million in 2022. The drop in valuation reflects the broader challenges faced by Indian esports streaming firms in generating revenue.

Challenges in the Indian Market

The limited number of popular games in the Indian market has been cited as one of the key reasons for the struggles of Loco and other esports streaming firms. However, the startup now sees a much larger opportunity outside of India and is looking to expand its global reach.

Global Expansion Plans

Loco’s founders, Anirudh Pandita and Ashwin Suresh, expressed their excitement about the new deal in a joint statement. They stated that the investment recognizes the immense work done by their team over the past few years and paves the way for the company to build a global platform.

Building a Global Platform

Loco aims to create a Twitch-like platform that can serve markets where either Amazon-owned service hasn’t expanded to or has weak penetration. The startup currently operates in the Indian market, where gamers stream titles such as Grand Theft Auto V; Call of Duty: Infinite Warfare; Battlegrounds Mobile India; Free Fire; and Valorant.

Revenue Streams

Streamers on the platform earn revenue through virtual goods purchased by viewers. Loco has already struck licensing deals with several game publishers, including Krafton, Activision, and Riot, based on its ‘first-mover advantage.’

Expansion into New Markets

The acquisition of a majority stake in Loco by Redwood is expected to fuel the startup’s global expansion efforts. With a stronger financial backing, Loco will be able to expand its reach into new markets and build a more robust platform.

Background on Loco

Loco was founded in 2019 and has since become one of the leading esports streaming platforms in India. The startup has been backed by investors such as Catamaran Ventures, Krafton, and Hashed.

Recent Developments

The sale of Loco’s sister property, Pocket Aces, to Indian music label giant Saregama earlier this year has further strengthened the company’s position in the market.

Gaming Industry Developments

The gaming industry is expected to continue its growth trajectory, with a projected global value of over $190 billion by 2025.
Esports streaming platforms are becoming increasingly popular, with Loco and other startups leading the charge.
Redwood’s investment in Loco highlights the growing interest in esports and gaming investments.

Key Players

Redwood: A newly formed investment firm based in the UAE that has acquired a majority stake in Loco.
Loco: An Indian game streaming platform that aims to expand its global reach with the backing of Redwood.
Pocket Aces: A sister property of Loco that was sold to Indian music label giant Saregama earlier this year.

Key Statistics

$65 million: The deal value of the acquisition by Redwood in Loco.
$85 million: Loco’s current valuation following the acquisition.
2022: The peak valuation of Loco, which stood at nearly $150 million.

By expanding its global reach and building a more robust platform, Loco is well-positioned to capitalize on the growing gaming industry. With Redwood’s investment, the startup will be able to navigate the challenges in international markets and establish itself as