Summary:
Hike, a former unicorn valued at $1.4 billion, shuts down due to India's ban on real-money gaming.
The startup pivoted from a WhatsApp rival to gaming, generating over $500 million in revenue with Rush.
India's new gaming act has caused massive layoffs, with 2,000 jobs lost and firms cutting up to 90% of staff.
Investors are questioning founders on missed regulatory warnings, highlighting risks in the startup ecosystem.
Legal challenges are underway, but the Supreme Court has yet to hear petitions against the ban.
The Rise and Fall of Hike: A Cautionary Tale in India's Startup Ecosystem
Hike, once a celebrated unicorn valued at $1.4 billion, has officially shut down, becoming a major casualty of India's recent crackdown on real-money gaming. Founded by Kavin Bharti Mittal, son of Airtel's founder, the startup began as a WhatsApp rival in 2012 but pivoted to gaming after shutting down its messaging app in 2021.
Pivot to Gaming and Initial Success
Hike's primary platform, Rush, offered casual games like carrom and ludo for cash prizes, attracting over 10 million users and generating more than $500 million in gross revenue over four years. Backed by high-profile investors including Tiger Global, SoftBank, and Tencent, the company seemed poised for continued growth.
Impact of India's Gaming Ban
In August 2025, the Indian government introduced the Promotion and Regulation of Online Gaming Act, imposing a blanket ban on real-money gaming platforms. This move, aimed at addressing harms such as suicides linked to gaming losses, sent shockwaves through the $23 billion industry. Major players like Dream Sports and Mobile Premier League (MPL) began shutting down operations or pivoting to new ventures like micro-dramas and financial services.
Consequences and Industry Fallout
The ban triggered widespread layoffs, with around 2,000 job losses reported across companies such as Games24x7, Head Digital Works, MPL, and Zupee. Some firms are planning to cut up to 90% of their workforce. Venture capital firms have questioned founders about early signs of regulatory action and their failure to mitigate risks.
Legal Challenges and Future Outlook
The Indian Supreme Court has transferred all petitions challenging the new law for centralized review, but hearings have not yet begun. Despite the setback, Mittal expressed optimism, stating that the learnings are invaluable and his conviction for future ventures is stronger. Hike's U.S. business, launched nine months ago, showed promise, but scaling it globally was deemed not worth the capital or time investment.
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