Korea-headquartered global gaming firm Krafton, which operates India’s top-grossing mobile game Battlegrounds Mobile India (BGMI), will invest in five venture capital funds as a limited partner, alongside about half a dozen startup investments in India by the end of 2026.
The catch: instead of gaming, Krafton’s focus in India will be on consumer internet platforms and artificial intelligence, as its total investments in India hit $900 million this year.
The firm’s focus in India, a top executive at the company said, is to play the role of a strategic investor. For this, the company has earmarked $50-60 million to invest in VC funds as well as startups directly.
“We’re in the final closing stages of funding two funds in VC firms, as well as three startups—and we’ll announce all of them by the end of the year,” said Nihansh Bhat, lead for corporate development at Krafton India.
Strategic shift
On 21 April, Krafton, in partnership with asset management firm Mirae Asset’s India arm, announced a ‘unicorn investment fund’ with total available capital of ₹6,000 crore ($620 million). The latter, Bhat told Mint in an interview, was “to solely invest as a financial backer in high-growth startups.”
“Beyond that, though, our goal is to have deeper integration with funds and startups that we back—where we can offer strategic advisories and play a larger role in the life cycle of a fund or a startup. That’s where the rest of our India investments come in—where we are investing $50-60 million every year in ventures that have synergies with Krafton as a group. There has been a funding winter in the industry, and access to patient capital as ours is strategically important for VC funds,” Bhat added.
Industry stakeholders, however, said access to capital is available for funds in India, and that matching sectoral expertise is important.
“Krafton is one of multiple investors who offer perpetual capital to funds with deep study, thesis and expertise in specific fields. Alongside them, Japanese conglomerates such as Mitsubishi, Marubeni and Suzuki are patient, long-time investors without making much noise,” said Pratip Mazumdar, partner at Inflexor Ventures.
Mazumdar added that for most VCs, “the goal is to find the right limited partners whose areas of focus and expertise match that of the fund itself—it’s not just about the capital itself.” On 28 July, Inflexor announced a $135-million fund for sector-agnostic science, engineering and technology startups. The fund is anchored by Indian financial institutions.
Sector focus
Krafton, so far, has echoed Mazumdar’s sector-specific thesis, having invested in gaming-focused Lumikai and , which has invested in the likes of company information platform Tracxn and employee management platform Darwinbox, among others.
Anurag Ramdasan, partner at 3one4 Capital, said that Krafton is a long-term investor, and bring “a lot of” strategic value to India’s venture capital ecosystem. “It is also important to note that while the corpus of investments each year in India’s private capital market may not have dropped, the amount of money raised by each fund or firm has gone up. This means two things—one, that fewer entities may have raised money this year; and two, the overall startups ecosystem in India is showing maturity.”
Krafton, interestingly, has steered largely clear of investing in gaming companies—a factor that Bhat said was largely because of the very nature of casual gaming in India.
“The biggest challenge for casual gaming is that they are difficult to monetize in India. The only way to monetize casual games in India is through ads, which is a very difficult market. As a result, any studio building entertainment games (and not real-money games) in the country cater to foreign markets—which is not an area of focus for Krafton at the moment.”
Bhat claimed that the company’s per-startup investments range from $5-25 million.
“With AI, we believe that we can increase our singular investments up to $25 million at one time. But, we may start smaller too—eventually, our goal is to invest in a startup early, and be a stakeholder for the longer run. We do not have immediate exit strategies,” the executive said.
AI opportunity
In AI, however, Bhat admitted that India “still remains at an early stage of maturity.”
”Yes, it is true that most enterprise AI startups are yet to prove maturity. However, we do believe that India has strategic opportunities in AI—such as in deployment of Indian-language voice AI applications for specific use cases. We want to tap this opportunity, and will focus on it going forward.”
Incorporated in November 2020, Krafton India generated operating revenue of ₹120.8 crore in FY25, the latest available financials sourced via Tofler. The firm’s global parent ended 2025 with net operating revenue of ₹22,400 crore (KRW 3.23 trillion).
The company started investing in startups in India in early 2021, commencing with a $22.5-million investment in gaming startup Nodwin in March of that year. While its first two investments were in the gaming space—the second being in game streaming startup Loco—it has since sought to diversify its portfolio in the country.
Krafton’s non-gaming investments in India so far include leading a $22-million funding round in in 2022, and a $53-million round in financial services platform Cashfree.