Tendulkar's SMAAASH hits a sixer with private equity

FW Sports Investment Fund LP, a Mauritius-based private equity fund, has acquired a significant minority stake for about Rs 100 crore in Mumbai-based Smaaash Entertainment Pvt Ltd, which is promoted by cricket icon Sachin Tendulkar and serial entrepreneur Shripal Morakhia.

This is the first round of private equity funding into the company.

While both FW Sports and Smaaash Entertainment did not divulge the financial details of the transaction, a person close to the deal said it was about Rs 100 crore, and both Tendulkar and Morakhia diluted stake for raising growth capital.

[caption id=“attachment_83303” align=“alignleft” width=“380”]  Sachin Tendulkar. Getty Images[/caption]

SMAAASH now has a total equity capital base of about Rs 150 crore and the capital will be utilised for funding the company’sexpansion plan.

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Spread over 70,000 square feet, SMAAASH is a recreational destination in Mumbai and is home to highly interactive simulators, where one gets the opportunity to test their skills by playing against the most formidable opponents. The centre has a cricket simulator, an F1 race simulator; a football simulator; a six- lane twilight bowling alley, an indoor paint-ball arena, several other exciting attractions and a world class sports bar and restaurant.

STAR India has also been associated with SMAAASH its inception.

“SMAAASH is an emotionally and physically engaging proposition that uses technology to meet consumer aspirations. Our plan is to open multiple centres across India and globally over the next couple of years, and FSIF’s involvement will help us immensely with our global plans,” said Shripal Morakhia, founder-director of SMAAASH, who had earlier founded SSKI and ShareKhan.

Sporting enthusiasts can leverage the technology at SMAAASH to harness their skills and gain experience of challenges faced on the field, said Tendulkar, in a statement.

This is the second major investment by FSIF, Asia’s first sports dedicated fund. Earlier this year, FSIF had acquired a significant minority stake in Technology Frontiers, a provider of in-stadia activation solutions. The fund is led by Anand S. Krishnan, who has earlier been a managing director at JPMorgan in the Americas and Asia.

“SMAAASH leverages sports as a medium to connect with customers - families, corporates, and retail. The company is uniquely positioned to expand its footprint throughout India and worldwide; its innovative, differentiated, and aspirational offering addresses the bourgeoning demand for active entertainment,” said Krishnan said.

EY India acted as the exclusive investment bankers on the transaction and J. Sagar Associates acted as the legal advisor to FSIF. The deal was closed in about three to four months, a rare feat in today’s market, as investment decisions are being put on hold in the wait for general elections results on May 16.

“The Indian sports-based entertainment industry has grown rapidly over the last few years, driven by an increase in discretionary spending ability of the consumer,” said Ajay Shah, partner, EY India who led the transaction.

Entertainment and sports businesses are seeing a lot of investor interest in the last few months. The Rs.180 crore initial public offering (IPO) of Wonderla Holidays Ltd, made a stunning debut on Friday. The company’s stock price rose nearly 32 percent higher on listing from its issue price of Rs.125. A few months ago, ICICI Venture invested Rs150 crore in entertainment theme park Adlabs Imagica.

“It’s the broader consumption theme in play here. Domestic consumption is very relevant for PE investors and they are willing to invest in sports and entertainment firms. As we can see, differentiated offerings are finding takers,” said Sunil Jain, founder partner at Sprout Capital Advisors LLP, an investment bank.