Lumikai leads $5M pre-series A for sports collectibles & skill gaming platform, BuyStars
We are thrilled to announce that we led a $5M investment in BuyStars, a sports collectibles and skill gaming company founded in 2021 by RMG industry veterans — Aman Satija and Sriram Krishnamoorthy.
Today, sport-based skill gaming platforms are driven largely by the daily fantasy (DFS) format. While DFS prove itself to be very successful to begin with, it has since run into a few challenges. To keep users engaged, DFS is mainly dependent on the occurrence of live sports events. In the absence of live events, users have little to do on DFS platforms, making them vulnerable to seasonality. This was further exacerbated during black-swan events such as the pandemic, where live sports came to a standstill. Despite being in existence for nearly a decade as a format, there has been little to no innovation in the sport-based skill gaming segment. The daily format of fantasy has remained a staple of existing platforms, with product innovation being largely limited to minor tweaks including differing team requirements and permitting live team changes. As the fantasy gamer becomes increasingly sophisticated, lack of product innovation and jaded formats has led to stagnating user engagement and eventually has a cascading effect on top-of-the-funnel acquisition and conversion.
That said, the Indian skill based real money gaming and fantasy sports segment accounted for $1.5B of the $2.6B gaming industry in FY22, growing at a 25% 5-year CAGR. While existing incumbents contribute a significant portion of this market, we expect future growth to be driven by new platforms that are approaching disruption with a product-first mindset.
This is where BuyStars comes in. BuyStars is challenging incumbents by building a next generation fantasy, skill based and sports collectible gaming platform introducing new product features and multi-game formats built upon an underlying trading economy and player collectibles to provide all-year play for users. From the lens of card collecting and trading, this is already proving to be a lucrative market. The global sports collectibles market is valued at $5.4B annually with sports cards trading growing at nearly 140% year-on-year in terms of volume.
BuyStars has built a robust trading marketplace for cricket players (undeniably, India’s most popular sport) on its platform. Users can buy, sell, and collect player cards — with a motive to either hold them for utility or to trade them in the future. This adds interesting dynamics for users to engage with. For example, a user, who believes a certain undervalued player will do well in an upcoming tournament, can purchase his/her card from the marketplace at good value. If the player does end up doing well and their value enhances, the user doesn’t have to spend as much to acquire the same card. This trading ecosystem encourages users to think about player performances not just a day in advance (like with traditional DFS), but weeks or months in advance. Power users are already distinguishing themselves on the basis of knowledge of the sport, player stats and performance, match outcomes and market liquidity.
In addition, BuyStars has built, and has in the pipeline, a host of skill-based games on the platform including a trump card format (in beta), fantasy games and mini-fantasy, to name a few. These games serve to provide utility to the cards owned by users and offer users multiple ways to engage with the platform. Player cards owned by users are to be used to participate in these games. For example, BuyStars’ DFS requires users to pick a team from already owned cards. In case a user does not own enough cards required to fill the quota, he/she has to purchase them from the marketplace. This creates a strong link between the cards, the marketplace, and the games on the platform. Utility is deeply critical to avoid inflation and speculation in a market economy building on trading.
The game design, economy balancing, liquidity management, and market pricing are of course the secret sauce.
These product features aim to solve the challenges with traditional sport-based skill gaming thereby leading to healthy, long-term player engagement and retention. The all-year long trading and multi-game formats that enable all season play make this compelling for users who already engage with traditional DFS.
The platform already sees promising signs of this approach. Since its launch, BuyStars has amassed more than 1.5M users, growing consistently at ~50% month-on-month. Over the same time period, the platform has achieved $1M+ in monthly GMV, which has also grown consistently month-on-month. Consistent growth in these parameters have shown that the platform is not very reliant on live-events.
Another key behaviour on the platform is that users trade cards and play multiple games, with the average daily time spent per user being 45 minutes. This has further proven out the company’s thesis of the users desire for experimentation with new formats and merits of a consolidated multi-game economy in fantasy as opposed to serving gamers just one particular format. This innovation results in a significant uptick in retention and LTV, driving meaningful unit economics in a sustainable fashion.
BuyStars was founded by Aman Satija and Sriram Krishnamoorthy, who are both veterans from India’s RMG ecosystem and have extensive experience in the consumer internet space. Aman has held leadership roles in marketing and growth at some of India’s leading RMG companies including Games24x7 and Junglee Games. Sriram was a senior product leader at Games24x7 and helped build their RummyCircle product. Outside of this, both founders have held leadership positions at leading Indian consumer internet companies such as Flipkart, Amazon, Lenskart, and CureFit. Furthermore, they have built a strong leadership team across product, tech, growth and revenue verticals in BuyStars.
Founders from L-R; Sriram Krishnamoorthy and Aman Satija
We believe that Aman and Sriram’s thesis around driving engagement and long-term retention via leveraging collectibles and trading cards is deeply compelling. Product-led innovation in this segment is necessary to disrupt incumbents and unlock value. The team’s unique insights, deep expertise combined with current user traction already reveal early potential, and we are extremely excited to partner with them on this journey.
We are also glad to have co-invested with Chiratae Ventures and Leo Capital in this $5M round. The funding will be allocated towards investing in growth and launching new games on the platform.