Nazara Technologies Limited has entered an agreement to acquire a 55% stake in programmatic advertising and monetisation company Datawrkz valuing the company up to Rs 225 crore linked to CY22 EBITDA performance. Nazara will acquire a 33% stake (Rs 60 crores payable of which Rs 35 crores is partly payable in cash and the balance consideration of Rs 25 crores will be paid either in cash or swap of shares) in the first tranche by April 22. Nazara reserves an option to acquire an additional 22% in the second tranche that is expected to close in Q4 FY23.
For Manish Agarwal, CEO, Nazara Technologies, ad tech companies with deep data processing capabilities and first-party data ownership will emerge as winners in gaming-focused ad tech and will help Datawrkz to create value for itself as well as for Nazara shareholders. “We, at Nazara, are looking to build strong gaming ad tech offerings globally with the partnership with Datawrkz. We strongly believe that growth of gaming-focused ad tech will be exponential in the coming decade across geographies with the growth of gamers and game publishers across freemium, web3.0 and skill-based real money gaming,” he added.
Founded in 2013 by Senthil Govindan, IIM Ahmedabad alumnus, Datawrkz is a global advertising technology firm focused on accelerating user and revenue growth for clients through highly optimised digital advertising. With offices in the US, Singapore, and India, the firm functions as an Independent trading desk to power digital media strategy, planning and execution. On the supply side, Datawrkz generates higher revenue for publishers through AdPrimus, its supply-side product set that drives higher user engagement, mediates between demand sources, and enables audience segmentation. For the calendar year 2021, Datawrkz posted combined revenue of Rs 90.7 crore and EBIDTA margin of 12% with around 70% of its revenue coming from the US as per CY2021 unaudited financial statements.
Datawrkz tech offerings will enhance in-house capabilities of Nazara for optimising its customer acquisition spending as well as enhance yields on ad monetisation of its large consumer base. This ad revenue monetisation is expected to assist many of the companies in the ‘Friends of Nazara’ network. Further, there is an increasing symbiotic relationship between gaming companies and ad tech companies worldwide as a combination of the two will be value accretive for both businesses. With this transaction, Datawrkz aims to establish itself as a key player in gaming, covering both demand and supply side offerings for the gaming ecosystem in the US and India.
“We had started this company with a vision to disrupt the digital advertising space. 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. 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 monetisation products with a sharp focus on the gaming vertical,” Senthil Govindan, founder, Datawrkz, stated.
Having acquired multiple companies over the past few years, Nazara has placed itself in a leading position in esports, interactive gaming and gamified early learning space. Nazara has acquired a majority stake in Nodwin Gaming Pvt. Ltd (57.05%); Next Wave Multimedia Pvt. Ltd. (52.38%), which operates World Cricket Championship (WCC), the largest mobile-based cricket simulation game, in addition to investment in Absolute Sports Private Limited, which operates Sportskeeda (63.90%) and Paper Boat Apps Private Limited (50.91%) – gamified early learning subscription app and OpenPlay – Skill Gaming (100%).
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