Web3 gaming startup Kratos Studios has raised Rs 160 crore in its seed round, led by Accel, with participation from Prosus Ventures, Courtside Ventures, Nexus Venture Partners, Nazara Technologies and others.The funding values the entity at Rs 1,200 crore.Founded by former Nazara Technologies chief executive Manish Agarwal and Ishank Gupta, Kratos Studios has also completed the acquisition of gaming venture IndiGG from Yield Guild Games (YGG) through a token swap, an equity swap equivalent for decentralised autonomous organisations (DAOs).Agarwal told ET that IndiGG will utilise the funds to build a product platform, support gaming teams, build communities and a global brand through IPs and Web3 e-sports competitions.“These are the four areas where we will use the funds,” he said. “But more importantly, we want to create operational cash flows faster so that this fund is there for a rainy day and not to burn.”Agarwal said though the company can expand the community by 100x, if the platform’s capacity utilisation is only 5%, then there will be a churn in the community.Discover the stories of your interestBlockchain5 StoriesCyber-safety7 StoriesFintech9 StoriesE-comm9 StoriesML8 StoriesEdtech6 Stories“Percentage capacity utilisation is very important in a two-sided marketplace,” he added.IndiGG said in a statement that Agarwal and Gupta will continue to work closely with Yield YGG’s co-founder Gabby Dizon and Polygon’s co-founder Sandeep Nailwal, who has invested in YGG, towards building the largest gaming DAO in the world.Subrata Mitra, partner at Accel, said: “Blockchain can fundamentally transform gaming and accelerate growth in emerging markets. We believe that this team is the best suited to unlock this value for Gamers.”On the challenges that the ecosystem could face over the next six to seven years, Agarwal said the availability of good quality games was key to the success of the model.“It is very important for us to have a number of good quality games with deep progression systems,” he said.Agarwal said the entity had 106 games in its portfolio, of which 40-44 are in alpha-beta stage, with the rest of them being in development. “Of the 40-44 games, 15 are live on our platform,” he added.He also alluded to a steady supply of games being important to build the platform