Startup Deep Dive : WinZO — record profit in FY24, then banned by law in 2025

In FY24, WinZO told the world it had become India’s most profitable real-money gaming company: ₹1,055 crore (about $110 million at ₹96 to the dollar) in revenue and ₹315 crore in profit, filed with the registrar and reported by multiple outlets in April 2025. Nineteen months later, the company that had out-earned most of its rivals could not survive the law that banned the business those numbers came from.

By November 2025, WinZO’s co-founders, Paavan Nanda and Saumya Singh Rathore, were in custody, arrested by the Enforcement Directorate on money-laundering charges. By early 2026, roughly 130 employees had not been paid since January, and a demand notice from Paytm over a ₹3.6 crore ad bill was sitting in India’s bankruptcy tribunal. This is the story of how a 28% tax and then an outright ban turned a profitable seven-year-old startup into a company fighting to keep its bank accounts unfrozen.

Quick facts

What they do

WinZO built a mobile gaming app aimed squarely at the India that most gaming apps ignored: Tier II to Tier V towns, playing in 12 or more Indian languages, on cheap Android phones and patchy data. The app hosted more than 100 casual and skill-based titles, from carrom and ludo to trivia and card games, built by third-party studios that plugged into WinZO’s console rather than WinZO’s own engineering team. Some games were played for entertainment; others, until August 2025, were played for real cash entry fees and prize pools, which is what made WinZO a real-money gaming (RMG) company in the eyes of Indian regulators, and what eventually forced it to switch that part of the business off entirely.

The origin

Paavan Nanda is an engineer who studied at IIM Calcutta and Copenhagen Business School and worked at Bain & Company, Abbott and Merrill Lynch before turning founder, as per his own public profile and startup press coverage. His first company, ZO Rooms, was a budget-hotel aggregator that collapsed into a bruising, unfinished merger with OYO in 2015. Saumya Singh Rathore had worked alongside him at ZO Rooms. When that venture ended, the pair looked at India’s gaming numbers rather than its hotel numbers, and the insight that became WinZO was simple: industry estimates cited by YourStory in 2020 put 80% of India’s active gamers outside metro cities, with 40 to 60% of the overall gaming population in Tier II towns and smaller, yet almost every big gaming app was built in English for a metro audience. WinZO, launched in 2018, was built the other way round, in Hindi, Tamil, Telugu, Bengali and other languages first. It said it had crossed 20 million users within about a year, an early-scale claim reported by YourStory in April 2020 that helped it raise its first institutional rounds.

The struggle years

WinZO’s growth years were expensive years. In FY22 (year to March 2022), the company’s revenue rose 2.3 times to ₹234 crore, but its loss widened 2.4 times to about ₹120.6 crore, according to matching filings-based reports from Entrackr and Inc42 in February 2023. The reason was blunt: WinZO’s advertising and promotional spend jumped roughly 6.5 times to ₹198.6 crore that year, meaning the company was, by Entrackr’s calculation, spending ₹1.55 to earn every rupee of operating income. That is a near-death by a thousand cuts: a company buying growth so aggressively that it could not tell, from the outside, whether it had a durable business or a subsidised one.

The company answered that question in FY23, turning its first operating profit of about ₹126 crore on revenue of ₹674 crore, a swing Entrackr and Inc42 both reported in April 2024. Then, in October 2023, the Indian government imposed a 28% GST on the full face value of every bet placed on real-money gaming platforms, up from an 18% tax on the much smaller platform fee. Dream11, one of WinZO’s larger rivals, reportedly told partners to expect an 80% hit to EBITDA; Entrackr counted three gaming startups laying off staff and three shutting down entirely within weeks of the announcement, in an August 2023 report. WinZO, Nazara and Baazi Games jointly wrote to the government in July 2023 arguing that lumping “constitutionally protected” skill gaming in with betting and gambling would cause serious damage to the sector, a letter reported by Entrackr and Business Today. WinZO’s answer was to look outside India altogether: in October 2023 it launched in Brazil, the world’s fourth-largest mobile gaming market by download volume, earmarking $25 million to bring more than 100 of its partner studios’ games to Brazilian players, according to Forbes India and Business Standard’s coverage of the launch. It was WinZO’s first stated move in what it called a wider international expansion plan.

The turning point

The real turning point was not the GST hike; WinZO absorbed that and grew through it. It was the Promotion and Regulation of Online Gaming Bill of 2025, which banned real-money online gaming in India outright rather than merely taxing it more heavily. On one side of that line sat the company that, months earlier, had reported FY24 revenue of ₹1,055.22 crore (up roughly 57 to 70% on FY23 depending on which revenue base is used) and profit of ₹315.12 crore, a jump of around 150% that led some outlets to call WinZO India’s most profitable gaming company, as reported by YourStory and Business Standard in April 2025. On the other side of that line, from 22 August 2025, sat a company that had to switch off the product line that produced most of that profit. WinZO said publicly, through Storyboard18’s reporting, that “WinZo will abide by the law of the land” and promised no layoffs from the shutdown. Fifteen months earlier it had been counting record profit; fifteen months later it was explaining to its own staff, in an internal note leaked to the press, that “we are still shocked and have no clue what is the way forward.”

The money behind it

WinZO raised roughly $90 million to $92 million in total across around seven rounds between 2018 and 2021, according to Business Standard’s 2021 funding report and Tracxn’s company profile. Kalaari Capital was an early backer that, per Eximius VC’s case study on the investment, backed the vernacular-gaming thesis before it was fashionable. Makers Fund and Courtside Ventures, both specialist gaming investors, led or co-led the Series B alongside Steve Pagliuca, co-chairman of Bain Capital, who invested personally, as reported around the round. The largest round on record, a $65 million Series C in July 2021, was led by California’s Griffin Gaming Partners and took WinZO’s cumulative funding to about $90 million, Business Standard reported at the time; that round reportedly valued the company between $375 million and $450 million depending on the source, short of the unicorn status some coverage implied it was approaching. No larger primary round has been publicly reported since, which is notable for a company that went on to post record profits in FY24 and then lost its core business a year later: WinZO funded its growth phase almost entirely on 2018-2021 capital and on operating profit, not fresh equity.

How it makes money

WinZO never earned money the way a casino does. By its own description and multiple explainer pieces (Startup Talky, WinZO’s own blog), the prize pool collected from entry fees was to be paid out to players in full; WinZO’s revenue came from a service or platform fee charged on top of the entry fee, plus a commission it shared with the third-party studios whose games it hosted through its “Console” publishing product, plus brand sponsorships and, in non-cash games, digital voucher sales. WinZO has not published the exact percentage take rate it charged on entry fees, so that figure cannot be verified here and is left out rather than estimated. The part outsiders got wrong, per the company’s own framing, was treating WinZO as a betting operator: its argument, echoed by the industry’s joint 2023 letter to the government, was that these were games of skill with a service fee attached, not games of chance with a house edge, a legal distinction the 2025 ban ultimately erased for real-money formats regardless of skill content.

The numbers

Figures below are as filed and reported for WinZO Games; amounts are in ₹ crore.

FY25 (year to March 2025) figures were not publicly available at the time of writing; the real-money gaming ban only took effect in August 2025, so FY25’s filed numbers, whenever disclosed, would still mostly predate the ban’s impact, and FY26 is the year that will actually show the damage. Beyond the raw swing from profit to regulatory shutdown, the Enforcement Directorate’s own probe, as reported by Inc42 in February 2026, alleged WinZO generated about ₹3,522 crore through what it called “illegal or questionable” real-money operations over the company’s life and moved close to ₹255 crore to a subsidiary called Zo; those are investigative allegations, not audited figures, and are presented here as such.

Where the money comes from

For most of WinZO’s life, revenue was overwhelmingly a domestic, real-money-gaming story: Tier II to V Indian users, playing in regional languages, funding entry fees that generated the platform’s service-fee income. The 2023 GST shock pushed the company to diversify by geography rather than product, with the October 2023 Brazil launch aimed at a market Forbes India described as having over 90 million mobile gamers. The surprise is what came after the 2025 ban forced a diversification by product instead: WinZO’s pivot bets were ZO Play, a short-form video and micro-drama app; ZO Gold, a digital gold product; and STTOQ Invest Tech, a stockbroking venture, none obviously related to gaming, as detailed in Inc42’s February 2026 reporting. The Enforcement Directorate separately alleged that WinZO ran real-money games in Brazil, the United States and Germany out of India, a claim from the agency’s case rather than a disclosure by the company, and one that, if true, would mean the international expansion born from the 2023 GST hike quietly grew into a bigger share of the real-money business than WinZO ever detailed publicly.

The risks

Three risks sit on top of each other here, and each has already materialised rather than being hypothetical. First, regulatory concentration: WinZO’s core revenue line depended entirely on real-money gaming remaining legal in India, and the 2025 Act removed that legality nationwide in one stroke, not state by state as earlier gambling law disputes had run. Second, enforcement and legal risk: the ED’s raids between 18 and 22 November 2025 led to the freezing of ₹18.57 crore across eight bank accounts and, separately, of ₹505 crore in bonds, fixed deposits and mutual funds, and to allegations of an alleged $55 million transfer to a US-based entity and the use of algorithmic opponents in supposedly player-versus-player games, per reporting from LatestLY and Storyboard18 in November 2025; founders Nanda and Rathore were arrested on 27 November 2025 under the Prevention of Money Laundering Act. Third, working-capital and counterparty risk: frozen accounts do not distinguish between disputed regulatory dues and ordinary vendor bills, so Paytm filed an insolvency petition in the NCLT over an unpaid ₹3.6 crore advertising bill in late 2025, per Bar and Bench, and by early 2026 around 130 of a roughly 220-person workforce (as of August 2025) had gone unpaid since January, per Inc42, even after WinZO’s public promise in August 2025 that no one would lose their job over the ban.

The takeaway

A business built on top of one regulatory permission is only ever as durable as that permission. WinZO absorbed a 400% jump in its tax rate in 2023 by cutting costs and expanding abroad, which looked, briefly, like proof of resilience. But a tax increase and an outright ban are different animals: one changes your margin, the other deletes your revenue line by law. The lesson is not that real-money gaming was doomed, or that WinZO’s founders were reckless; it is that companies whose entire model sits on a single, contested piece of regulatory tolerance should build their next leg of revenue before the regulator forces the question, not after, because by the time the escrow accounts are frozen it is too late to diversify calmly.

Frequently asked questions

What does WinZO do?

WinZO is a Bengaluru-founded gaming platform, launched in 2018, that hosted more than 100 casual and skill games in 12-plus Indian languages aimed at users outside India’s big metros; it also ran real-money entry-fee games until India’s 2025 gaming law forced it to shut that part of the business down.

Who founded WinZO and when?

Paavan Nanda and Saumya Singh Rathore founded WinZO in 2018, after their previous venture, the hotel-booking startup ZO Rooms, ended in an unsuccessful merger attempt with OYO.

Why did the 2023 GST change hurt WinZO?

In October 2023, the government raised GST on real-money gaming to 28% of the full bet value rather than the platform fee, a roughly 400% effective tax increase for the industry; WinZO responded by cutting costs and expanding into Brazil rather than shutting down, unlike some smaller rivals.

What happened to WinZO after India’s 2025 gaming ban?

WinZO shut down its real-money games from 22 August 2025 to comply with the Promotion and Regulation of Online Gaming Bill, 2025, and said it would protect jobs while pivoting to non-cash-gaming bets like ZO Play and ZO Gold; months later, the Enforcement Directorate raided the company, froze several bank accounts, and arrested its co-founders in November 2025 over money-laundering allegations.

Is WinZO still operating in 2026?

As of early 2026, WinZO’s non-real-money products were still running, but the company was dealing with frozen accounts, an NCLT insolvency petition from Paytm, and roughly 130 unpaid employees, according to Inc42’s February 2026 reporting; no updated valuation or FY25/FY26 financials had been publicly disclosed at the time of writing.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• YourStory, “This startup by ex ZO Rooms founder could be the ‘Netflix of Gaming'”, June 2019
• YourStory, “How focusing on Bharat helped gaming startup WinZO notch up 20M users in 1 year”, April 2020
• Entrackr, “WinZO raises Rs 133 Cr Series B round, valuation touches Rs 460 Cr”, September 2020
• Business Standard, “WinZO raises $65 mn in Series C round, led by Griffin Gaming Partners”, July 2021
• Eximius VC, “Kalaari Capital and WinZO” case study
• Tracxn, “WinZO — 2026 Company Profile, Team, Funding, Competitors & Financials”
• Entrackr, “WinZo’s scale crosses Rs 230 Cr in FY22; losses spike 2.4X”, February 2023
• Inc42, “Gaming Startup WinZO’s FY22 Loss Widens 2.3X To INR 121 Cr As Ad Expenses Surge”, February 2023
• Entrackr, “Nazara, Winzo, and others write to govt to protest 28% GST on ‘online skill gaming'”, July 2023
• Business Today, “Online gaming companies, associations write to Centre to reassess 28% GST”, July 2023
• Entrackr, “28% GST on online real money games: 3 layoffs, 3 shutdowns, what’s next?”, August 2023
• Forbes India, “WinZO Expands To Brazil Post 28 Percent GST Announcement”, October 2023
• Business Standard, “WinZO forays into Brazil gaming market amid 28% GST hike, to invest $25 mn”, October 2023
• Entrackr, “Winzo ends FY23 with Rs 674 Cr revenue and Rs 126 Cr PAT”, April 2024
• Inc42, “Gaming Startup WinZO’s FY23 Revenue Surges Nearly 3X To INR 674 Cr”, April 2024
• Business Standard, “Winzo FY24 results: Profit more than doubles to ₹315 cr; revenue up 70%”, April 2025
• YourStory, “WinZO reports 150% jump in FY24 profit buoyed by user expansion”, April 2025
• Storyboard18, “WinZO shuts real-money gaming operations, assures no layoffs”, August 2025
• YourStory, “Almost a month after ban, online real-money gaming companies chart new course”, September 2025
• Bar and Bench, “Online gaming ban effect? Paytm files insolvency plea against WinZO in NCLT over ₹3.6 crore dues”, November 2025
• LatestLY, “WinZO Founders Saumya Singh Rathore and Paavan Nanda Arrested by ED on Money Laundering Charges”, November 2025
• Storyboard18, “‘Unexpected Guests’ and a WFH order: WinZO Founders’ message to employees hours before arrest”, November 2025
• Inc42, “WinZO’s Crisis Deepens: Unpaid Employees, Legal Troubles And Failing New Bets”, February 2026

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