How Sachin Tendulkar-backed Smaaash is making a comeback with 45 stores by June 2022

• Smaaash announced its “pre-mature” closure in September 2020 as the country was facing the worst of COVID-19 throughout the year.
• The company — which was in over 45 centres across India in its first innings — is now settled with 22 centres across 14 cities.
• It has stepped away from its traditional ‘for kids’ offering to reimagine itself as a business that caters to the needs of young adults and working professionals.

After briefly shutting down its business nearly 18 months ago, popular Indian gaming and entertainment centre operator Smaaash has spent the last one year rebuilding itself.

The Sachin Tendulkar-backed company — which now refers to its business model as Smaaash 2.0 — has stepped away from its traditional ‘for kids’ offering to reimagine itself as a business that caters to the needs of young adults and working professionals. The aim of the space is to give an entertainment center for adults, but with the same vibe as the local club.

Dim lights and upbeat music, finger foods and alcohol, arcade games to bowling alleys is all one can expect from Smaaash 2.0.

The company — which was in over 45 centres across India in its first innings — has now opened 22 centres across 14 cities for the second one. It claims to have an EBIDTA (earnings before interest, taxes, depreciation, and amortisation) run rate of ₹4 crores at the store level, which is 20% higher than before.

So what has changed since the last time?

Smaaash — which has raised close to ₹700 crore from Sachin Tendulkar and Sixth Sense Ventures — announced its closure in September 2020 as the country was facing the worst of COVID-19 throughout the year. The company did not have the runway to continue and there wasn’t enough footfall in the physical store.

The company’s founder Shripal Morakhia, in an email to its employees, said he was sorry that despite his best efforts he has failed in his efforts to save the company from its “premature death”. However, Smaaash restarted its operations once again in Raipur and Vijayawada and built on top of that.

The company had lost several prime locations it was previously operating in, so it decided to build on its latest network in alternative locations with larger and more open spaces. Shirish Kotmire, the chief executive officer (CEO) of Smaaash, believes that this offers them the opportunity to work in bigger and more open locations, at less the cost.

Secondly, the company has also spent the last one year in reading customer behaviour and effectively enhancing the value per customer. The company has expanded virtual reality (VR) offerings by introducing new games and upgrading traditional games to VR as well. Besides, it has also introduced physical games like shooting. This, coupled with dining and beverages options, increases the time spent by the customers in Smaaash stores and the average cost per customer goes up too.

The company had dine-in option earlier as well, but it now emphasises reading into customer behaviour and needs.

“We are ensuring that we give an entire experience, where they [customers] graduate from playing just games to consuming food and liquor, to consuming time there. When you give them a gaming environment, combined with a food and gaming experience, and the pocket friendly nature, the time of the entire experience increases … We are really good at upselling now. Because it’s a gaming concept no one comes to have food-food,” Kotmire noted.

How has Smaaash been strengthening itself?

Smaaash started its rebuilding efforts in metropolitan cities like Mumbai and Delhi, and then the letter grew in a conservative manner by focusing on cities that were less likely to face stricter COVID-19 norms. In the second phase it expanded to Raipur, Gwalior, Vijayawada, and Bhubaneswar.

The company is now looking to expand with 23 more stores by mid-2022, where the deals are already signed and project-related work has begun. These stores would be located in existing markets like Noida and Gurugram as they would be able to absorb the supply of customers, and also venture into newer markets like Barnala, Amritsar, Pathankot, Udaipur, Jodhpur and Bengaluru.

While the company claims that they will be carrying out this expansion using the revenue they have generated so far, they are also starting their hunt for funds in the next three months. Kotmire explained that they are at a point when they are just getting re-noticed by the investors, but they need to reach a critical size with a three or four-digit revenue figure.

“What is funding for? The funding is for scale. We are just doubling stores now, we are going back to our earlier level of 40-45 stores. They are saying what’s new [to fund],” Kotmire said, explaining that convincing an investor to fund an offline business takes a little more time in the current scenario. He emphaises that the confidence of its existing investors is also coming back due to its performance in the last couple of months.

“In the same sequence that it closed down, in the same sequence it’s taking off in a big way,” Shirish Kotmire, the chief executive officer (CEO) of Smaaash, said.

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