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Fantasy stock gaming application TradingLeagues has raised $3.5 million in a pre-Series A funding round led by Leo Capital, along with participation from investors, including Jeejeebhoy Family Office and the family office of KP Balaraj (Co-founder of Sequoia India and Westbridge Capital).

With the fresh infusion of funds, the Bengaluru-headquartered firm plans to grow its user community and enhance the user experience on the app.

Launched in November last year, the app is operated by RAIN Technologies, started by Raghu Kumar (Co-founder, Upstox) and Harsh Agarwal (Co-founder, AGacquisitions). The company also runs a social investment app, TradingRooms.

While the firm is registered in the US, the majority of its operations are based out of its Bengaluru office.

The gaming app allows users to play on free and paid fantasy trading leagues, test predictions and indicators, make investment strategies, or develop stock market skills. It focuses on Indian and US stocks and the crypto market. Besides the platform/entry fee, the stock gaming app earns by taking a percentage of the competition’s prize pool.

Since it launched five months ago, the app has seen over 7.5 lakh downloads and claims to be inching towards a million. While the company did not share its total active users count, it said about 8% of its users are active daily and 60% are active monthly. 

“The mass majority of Indians don’t have access to the financial markets, and thereby never become aware of the earning potential of the stock markets. TradingLeagues solves this pain point,” said Co-founder Raghu Kumar. 

He continues, “Our goal is to introduce crores of Indians to the financial markets, and that too quickly, by leveraging the incredible power of gamification and removing the unnecessary obstacle of opening a brokerage account.”

“We built TradingLeagues as a fantasy gaming app, first and foremost, since it was important to retain traditional gaming elements while introducing users to the financial markets,” says Agarwal, adding, “Existing gamers find our app easy to use since the focus has been to build a highly intuitive user experience. Our near-term goal is to make the app more robust and introduce various exciting product features, which our users have been asking for.”

Regulatory scanner

Recently, stock gaming apps came under scanner for using stock exchange data for gaming and virtual trading purposes, besides sourcing the same from unauthorised vendors. YourStory earlier reported that NSE Data and Analytics Ltd issued notices to multiple fantasy stock trading apps to immediately stop using its data. It also demanded damages for violating NSE’s intellectual property rights, cost for loss of revenue, and reputational loss.

On the same, Kumar clarified that app doesn’t rely on exchanges and obtains market-related data from multiple sources such as Contract for Difference (CFD) feeds, market reference feeds, and other aggregated data feeds to power the platform.

Since users cannot make direct investments, the company feels this kind of “reference market price” is suitable for the gaming use case offered on the platform.

US market launch plans

The company plans to launch the app in the US market in the next 12-18 months. “We are India-focused right now. Once our Series A round goes through, we will work on getting the necessary licenses and launch the app in the US and other markets. This will make TradingLeagues a cross border app, where global users can play against each other in an RMG environment,” said Kumar.

TradingLeagues faces competition from stock gaming apps like BullsSpree, StockGro, and Three Dots, among others. According to EY’s 2023 M&E report, India’s gaming industry is expected to reach Rs 23,100 crore by 2025 at a CAGR of 20%. There are more than 500 million online gamers in India, of which more than one-fourth are paying users.

Rajul Garg, Founder and Managing Partner, Leo Capital, said, “The recent online gaming regulations have increased investor confidence in the market, and we believe the market is ripe for growth. TradingLeagues has a strong founding team and business fundamentals. It has the potential to help Indians experience India’s trillion-dollar financial markets.”