This small-cap stock, backed by Rakesh Jhunjhunwala, jumps over 5 per cent on making a remarkable acquisition!
Interestingly, the company’s Kiddopia is the second-grossing app in its category and continues to maintain a high rating. With an app rating of 4.35.
Nazara Technologies, India-based diversified gaming & sports media company, announced the acquisition of the leading US children’s interactive entertainment company - WildWorks. Nazara will acquire 100 per cent of the company and its intellectual property (IP) from existing shareholders in an all-cash transaction. WildWorks revenues were USD 13.8 million in CY21 and USD 5.8 million in H1CY22 while its EBITDA stood at USD 3.1 million in CY21 & USD 1.6 million in H1CY22.
WildWorks is one of the most successful and established game studios focussed on the children’s market for ages 8-12 and is the number one grossing app in its category. In the past one decade, Wildworks’ mobile apps have attracted over 150 million players and as a result of today's deal, it’s expected to expand into new products & territories in 2023 and beyond. Two of the original founders, CEO Clark Stacey and COO Jeff Amis, will remain with the company in their current positions and lead its next phase of growth as part of the ‘Friends of Nazara’ network.
“With its strong brand presence and talented Utah-based development team, WildWorks enables us to solidify our leadership position in the gamified learning space for kids,” said Nitish Mittersain, Founder and MD of Nazara Technologies Limited. “The 8-12 player demographic of Animal Jam builds on the success of our Kiddopia early learning product for kids 2-7, extending our reach with families while maintaining our focus on high-quality educational content. Successful brand partnerships like ‘Tag with Ryan’ also showcases the potential for leveraging WildWorks platform in new categories.”
Interestingly, the company’s Kiddopia is the second-grossing app in its category and continues to maintain a high rating. With an app rating of 4.35, it has been ranked by nearly 97,000 users with 72 per cent rating it five stars. Consumer propensity to pay for kids learning category is high. Taking advantage of this, players across the board increased pricing and passed on higher costs post IDFA to the end consumer. In June 2022, Kiddopia’s subscription pricing was increased to USD 8.99 (13 per cent increase) for monthly subscriptions and USD 69.99 (8 per cent increase) for annual subscriptions. Even post this increase, Kiddopia is priced significantly lower than competitors, leaving headroom for a further price increase. Post this price increase, the company’s 24-month LTV/CAC increased to 2.0x.
WildWorks describes its Animal Jam game as an online playground for kids, who love animals and the natural world. Available on iOS and Android mobile devices in addition to Mac and PC computers, the game features world-building as well as multiplayer games in a closely moderated social play space and offers a wealth of free STEAM-oriented educational content that players can access in the app and through the AJ Academy website. Following Nazara acquisition, WildWorks plans to localise the existing Animal Jam apps for new territories and develop new apps & interactive experiences with the brand.
In the recently-concluded quarter ended June 2022, the overall revenue saw a spellbound growth of 70 per cent as against the previous year, leading to a PAT growth of 22 per cent on YoY. The stock price has jumped more than 5 per cent with robust volume as volumes recorded for the day are the highest single-day volume since August 16.
The cherry on top is that late ace investor Rakesh Jhunjhunwala has a stake in this company!