Bangalore-based social gaming startup HashCube Technologies Pvt Ltd has raised an undisclosed amount from Indian Angel Network (IAN) and Blume Ventures. Sharad Sharma, Rajan Anandan and Hemant Kanakia of IAN invested in the company and Sharma would join the board of HashCube as part of the deal.
The company had earlier raised Rs 5 lakh from iAccelerator, a programme by Centre for Innovation, Incubation and Entrepreneurship (CIIE) of the Indian Institute of Management, Ahmedabad.
"This is the first investment IAN has made in an India-based social gaming company focused on the global market. Also, in the future we will not be investing in any company that directly competes with HashCube," said Sharma.
HashCube was set up by Deepan Chakravarthy and Ramprasad Rajendran, and has been operational since 2008. Prior to HashCube, Chakravarthy has worked with companies like NovaGlobal, Svapas Innovations and SpikeSource. He holds a B.S. degree in Biotechnology from Anna University. Rajendran has worked with Motorola and Wipro Technologies and holds a B.E degree in computer science from Kongu Engineering College.
The company develops puzzle games for social networking sites and mobile platforms for the US and other western countries. Some of its successful titles include Sudoku Battle and Sudoku Quest. As of now, the company claims to have over two million users, out of which, most are from the US (accounts for 9 per cent of the total user base), Canada, Western Europe and Latin American countries.
The company generates revenues primarily from Facebook credits (it accounts for 60-80 per cent of its revenues) and rest come from banner advertisements, in-game advertisements and other offers. For the virtual goods sold, Facebook takes 70 per cent of the revenues, while the company gets the rest.
"HashCube approached IAN due to its network of investors who understand the social gaming space. The funds will be used for promoting existing games, improving those by adding new features and building a portfolio of new games," said Chakravarthy.
He said the company is planning to achieve user base profitability in the next two months, which basically means making the lifetime value of the user higher than the user acquisition cost. The company will remain focused only on social games, but is open to 'publishing partnerships' with other companies if an opportunity arises.
Karthik Reddy, managing partner of Blume Ventures, said, "We have seen the HashCube team continuously evolve their Sudoku games and other products on social platforms and we believe that they are on the cusp of building great scale for the games in their pipeline." Blume Ventures is a seed-level fund, backing startups with funding, mentoring and support.
IAN has funded over 35 startups across several sectors, such as IT, mobile, healthcare and education. In 2011, IAN invested over $8 million in 11 startups, making almost a deal a month. It has already invested in seven companies in 2012 (HashCube being the seventh investment) and is looking to close another five investments by the end of this month. Sharma mentioned that IAN's final investment tally at the end of 2012 could be anywhere between 18 and 24.
Of late, the gaming space is attracting considerable investments. Last month, Pune-based gaming startup Rolocule Games Pvt Ltd had raised undisclosed angel funding from Mumbai Angels and Blume Ventures. Earlier, Mumbai-based Gamiana Digital Entertainment Pvt Ltd raised nearly $1 million from the Indian Angel Network. Also, earlier this year, Nirvana Venture Advisors, the early-stage VC fund of the Patni family, acquired 10 per cent stake in Games2win from a clutch of VC and PE firms, as well as from employee shareholders, for an undisclosed amount.
(Edited by Sanghamitra Mandal)