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The Enforcement Directorate (ED) arrested the cofounders of gaming unicorn Winzo on Thursday on money laundering charges under relevant sections of the Prevention of Money Laundering Act (PMLA).
The crackdown follows search operations in Delhi and Gurugram that resulted in the freezing of deposits worth approximately Rs 523 crore belonging to Winzo and peers like Gameskraft.
Who are Winzo’s cofounders?
Winzo cofounders Saumya Singh Rathore and Paavan Nanda were taken into custody after searches at properties in Delhi and Gurugram linked to the company and its associates.
Paavan Nanda is an Indian entrepreneur who, in 2018, built hostel franchise chain Zostel and its budget hotel aggregator, ZO Rooms.
Nanda holds an MBA from the Indian Institute of Management, Calcutta (IIM-C), and a bachelor’s degree in engineering from the Netaji Subhas Institute of Technology (NSIT), New Delhi.
Nanda’s career trajectory spans roles in consulting, investing, and global markets, with experience at companies such as Bain & Company, Abbott, and Merrill Lynch, according to his LinkedIn.
Saumya Singh Rathore co-founded Winzo with Paavan Nanda in 2017. Rathore was also part of the core team at ZO Rooms in 2015 for nearly 11 years, where she worked as chief of staff and led growth and expansion for the company.
Rathore pursued a master’s degree in organisation and consumer psychology (industrial and consumer psychology) from the University of Manchester in 2008 and is an alumna of Bangalore University, where she studied applied clinical psychology in 2005.
The case
According to the ED, Winzo matched paying users (players) against algorithms rather than real people, tilting outcomes and ensuring losses. The company earned Rs 177 crore through this system over 14 months. It has denied wrongdoing.
The agency also said the platform withheld user funds, despite the new online gaming law requiring refunds.
Also Read: SC dismisses Zostel's appeal against Oyo
Winzo financials
Winzo reported a 70% rise in operating revenue to Rs 1,055.2 crore for the financial year ended March 2024, despite a challenging regulatory environment for the online gaming sector in India.
The company’s adjusted net profit grew 2.5 times to Rs 315 crore, up from Rs 125 crore the previous year.
The firm attributed this financial performance to a growing user base, which reached 250 million during the year, driven by its multi-gaming platform, micro-transaction model, and developer-led monetisation strategy.
The company’s total expenses for the fiscal year rose to Rs 693 crore, up from Rs 510 crore in the previous year.
The Gurugram-based firm, which claims 250 million users and over 100 competitive and social games, had also launched a short-video feature called ZO TV along with its US debut in August this year. The product aims to tap into the growing convergence of gaming and content formats.
Also Read: RMG ban sparks massive impairments as gaming majors erase India bets
The crackdown follows search operations in Delhi and Gurugram that resulted in the freezing of deposits worth approximately Rs 523 crore belonging to Winzo and peers like Gameskraft.
Who are Winzo’s cofounders?
Winzo cofounders Saumya Singh Rathore and Paavan Nanda were taken into custody after searches at properties in Delhi and Gurugram linked to the company and its associates.
Paavan Nanda is an Indian entrepreneur who, in 2018, built hostel franchise chain Zostel and its budget hotel aggregator, ZO Rooms.
Nanda holds an MBA from the Indian Institute of Management, Calcutta (IIM-C), and a bachelor’s degree in engineering from the Netaji Subhas Institute of Technology (NSIT), New Delhi.
Nanda’s career trajectory spans roles in consulting, investing, and global markets, with experience at companies such as Bain & Company, Abbott, and Merrill Lynch, according to his LinkedIn.
Saumya Singh Rathore co-founded Winzo with Paavan Nanda in 2017. Rathore was also part of the core team at ZO Rooms in 2015 for nearly 11 years, where she worked as chief of staff and led growth and expansion for the company.
Rathore pursued a master’s degree in organisation and consumer psychology (industrial and consumer psychology) from the University of Manchester in 2008 and is an alumna of Bangalore University, where she studied applied clinical psychology in 2005.
The case
According to the ED, Winzo matched paying users (players) against algorithms rather than real people, tilting outcomes and ensuring losses. The company earned Rs 177 crore through this system over 14 months. It has denied wrongdoing.
The agency also said the platform withheld user funds, despite the new online gaming law requiring refunds.
Also Read: SC dismisses Zostel's appeal against Oyo
Winzo financials
Winzo reported a 70% rise in operating revenue to Rs 1,055.2 crore for the financial year ended March 2024, despite a challenging regulatory environment for the online gaming sector in India.
The company’s adjusted net profit grew 2.5 times to Rs 315 crore, up from Rs 125 crore the previous year.
The firm attributed this financial performance to a growing user base, which reached 250 million during the year, driven by its multi-gaming platform, micro-transaction model, and developer-led monetisation strategy.
The company’s total expenses for the fiscal year rose to Rs 693 crore, up from Rs 510 crore in the previous year.
The Gurugram-based firm, which claims 250 million users and over 100 competitive and social games, had also launched a short-video feature called ZO TV along with its US debut in August this year. The product aims to tap into the growing convergence of gaming and content formats.
Also Read: RMG ban sparks massive impairments as gaming majors erase India bets