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Dream11 parent bags $840 million funding at $8 billion valuation –

Dream11 spent heavily on advertising and promotions during the fiscal, in a bid to capitalise on the surge in mobile gaming in the country

Sports tech firm Dream Sports, which owns the online fantasy platform Dream11, has closed a $840 million funding round led by Falcon Edge, DST Global, D1 Capital, Redbird Capital and Tiger Global. The round also saw participation from existing investors TPG and Footpath Ventures.

The round values the firm at $8 billion, up from $5 billion in March this year when its raised $400 million in secondary financing.

“Our vision and mission is to create an entrepreneur-led virtuous cycle of investment, innovation and wealth creation for all stakeholders in the sports ecosystem, from fans to athletes, teams and leagues. Our investors have deep experience in developing sports ecosystems globally, and we are fortunate to have their guidance to ‘Make Sports Better’ for 1 Billion Indian sports fans,” said Harsh Jain, CEO and co-founder, Dream Sports.

Founded in 2008 by Harsh Jain and Bhavit Sheth, Dream Sports houses brands such as sports content and commerce platform FanCode, its corporate venture and M&A arm Dream Capital, sports experiences platform DreamSetGo, game publisher Dream Game Studios, and payment solutions provider DreamPay, apart from Dream11. It claims to have a user base of over 140 million users and employs close to 1,000 people.

Avendus Capital was the exclusive financial adviser on the transaction.

Earlier this year, Dream Sports had also earmarked $250 million to Dream Capital that has built up a portfolio of 10 early-stage startups including Fittr, SoStronk, KheloMore and Elevar. Dream Capital now plans to expand its sports, fan engagement and fitness portfolio in India and across the world.

“We’re excited to partner with the Dream Sports family in their vision of building the leading end-to-end sports tech company in India,” said Rahul Mehta, managing partner at DST Global. “We’re very impressed with their customer centric approach, product strategy and ability to strengthen connections between fans and their favorite sports.”

For the financial year ending March 2020, Dream Sports posted a profit of Rs 180.8 crore, making it one of the rare consumer-focused startup unicorns in India that have recorded a profit.

The company’s operational revenue jumped to Rs 2,070.4 crore in FY20, from Rs 775.5 crore in FY19. It attributed the revenue growth to new products and “innovative marketing strategies”.

Dream11 spent heavily on advertising and promotions during the fiscal, in a bid to capitalise on the surge in mobile gaming in the country amid the pandemic-induced lockdown and also drive app installs since it is not available on Google’s Play Store.

Pullback in Karnataka

However, it has hit a snag in Karnataka where both the cofounders are currently facing a police case over the continued operations of its platform, after the state’s online gambling law came into effect on October 5.

Dream11 said the law did not apply to members of the Federation of Indian Fantasy Sports (FIFS), a self-regulatory industry body for fantasy sports, since the format “has been upheld by the courts of India as not amounting to gambling, betting or wagering”.

However, it suspended operations in Karnataka on October 10, stating that this move was made to allay “deep concerns and anxiety” from its users in the state and “is without prejudice to our rights and contentions under the law”.

Moneycontrol had reported on October 24 that Dream11 had stopped allowing only those users in Karnataka who have a bank account within the state from entering paid contests on the platform. Meanwhile, other platforms such as Mobile Premier League, Junglee Games, Adda52 and Games24x7-owned My11Circle have placed geoblocking restrictions on users within the state.

Dream11 co-founders later moved the Karnataka High Court, alleging in their petition that the case was registered on the basis of “bald and vague allegations” made by the complainant, at the behest of its business competitors with a “mala fide intention of brushing the colour of gambling, betting and wagering to the activities of fantasy sports” carried out on the Dream11 platform.

On October 28, the Karnataka High Court had directed the state government not to take any coercive action against the Dream11 duo over the state’s online gambling law that came into effect on October 5. However, it had noted this order does not stall the investigation. The case is currently pending until the next hearing date.

Also read: Dream11, other Indian gaming companies look to launch NFTs