Krafton, the gaming giant behind Battlegrounds Mobile India (BGMI), is pivoting its investment strategy in India, committing $900 million to AI and consumer internet startups by the end of 2026. The company plans to invest $50-60 million annually in venture capital funds and startups, marking a significant shift from its gaming roots.
TL;DR
- Krafton is investing $900M in AI and consumer internet startups in India by 2026, with $50-60M allocated annually for VC funds and direct startup investments.
- The company aims to be a strategic investor, offering advisories and long-term support to backed ventures, moving away from gaming-focused investments.
- Krafton's shift reflects a broader trend of gaming companies diversifying into AI and other tech sectors, capitalizing on emerging opportunities.
What happened
Krafton, known for its popular mobile game BGMI, is redirecting its investment focus in India towards AI and consumer internet platforms. The company plans to invest in five venture capital funds and about half a dozen startups by the end of 2026, with a total investment of $900 million this year.
Nihansh Bhat, lead for corporate development at Krafton India, revealed that the company is in the final stages of funding two VC firms and three startups, with announcements expected by year-end. Krafton has already partnered with Mirae Asset to launch a $620 million unicorn investment fund, solely focused on high-growth startups.
Krafton's investment strategy in India includes a $50-60 million annual allocation for VC funds and startups, with a focus on strategic integration and long-term support. The company's per-startup investments range from $5-25 million, with a goal to increase AI investments up to $25 million at a time.
Why it matters
This shift signifies Krafton's strategic pivot towards AI and consumer internet, capitalizing on India's growing tech ecosystem. For developers and startups, this means increased access to patient capital and strategic support from a well-established player.
For investors, Krafton's move highlights the growing trend of gaming companies diversifying into AI and other tech sectors, offering new opportunities for collaboration and investment. The company's focus on strategic integration and long-term support could set a new standard for corporate investment in the region.
However, Krafton's executive Nihansh Bhat admitted that India's AI sector is still in its early stages, with most enterprise AI startups yet to prove maturity. This presents both challenges and opportunities for investors and startups alike, as the sector continues to evolve.
Key facts
- Krafton plans to invest $900 million in AI and consumer internet startups in India by the end of 2026.
- The company has earmarked $50-60 million annually for VC funds and direct startup investments.
- Krafton's per-startup investments range from $5-25 million, with a goal to increase AI investments up to $25 million at a time.
- Krafton has partnered with Mirae Asset to launch a $620 million unicorn investment fund, focused on high-growth startups.
- The company generated operating revenue of Rs.120.8 crore in FY25, with its global parent ending 2025 with net operating revenue of Rs.22,400 crore (KRW 3.23 trillion).
- Krafton started investing in Indian startups in early 2021, with its first investment being a $22.5-million investment in gaming startup Nodwin.
- The company has since diversified its portfolio, investing in audio streaming platform Kuku FM and financial services platform Cashfree.
Context
Krafton's pivot towards AI and consumer internet reflects a broader trend in the tech industry, as gaming companies seek to diversify their portfolios and capitalize on emerging opportunities. This shift is driven by the growing importance of AI in various sectors, as well as the increasing demand for consumer internet platforms in markets like India.
India's tech ecosystem has been gaining significant traction in recent years, with a growing number of startups and increased investment from both domestic and international players. This has created a favorable environment for companies like Krafton to explore new opportunities and expand their presence in the region.
However, the AI sector in India is still in its early stages, with most enterprise AI startups yet to prove maturity. This presents both challenges and opportunities for investors and startups, as the sector continues to evolve and grow.
