Delhi NCR-based fantasy esports startup FanClash has reportedly laid off around 75% of its workforce in three rounds, firing about 100 employees. The impacted employees were given a two-month salary as a severance package. The startup has been struggling since the Indian government banned battle royale game Battlegrounds Mobile India (BGMI) in July last year, which was a significant source of revenue for the company. Apart from BGMI, FanClash also lets users play fantasy for esports such as FreeFire, COD Mobile, COD PC, Valorant, CS:GO, League of Legends, and DOTA 2. However, the source said that fans of these games don’t actively play fantasy games, which led the company to foray into cricket ahead of the start of the Indian Premier League (IPL). The layoffs took place when there weren’t major esports tournaments taking place. The startup also shut down FanGuild, a fantasy Web3 gaming platform, and halted operations of its fan engagement platform FanSpace. The company raised $40 Mn in its Series B round in June 2022, a month before BGMI was banned. The funding round was led by Alpha Wave Global (formerly known as Falcon Edge) and saw participation from Sequoia Capital India, Polygon, and Info Edge.
It appears that despite FanClash’s recent struggles, the company had managed to raise significant funding prior to the layoffs and the shutdown of its Web3 gaming and fan engagement platforms. However, the ban on BGMI in India seems to have had a major impact on the startup’s revenue, which was heavily reliant on the game. It remains to be seen whether FanClash will be able to successfully pivot its business model and recover from the recent setbacks.