India’s largest online fantasy sports company Dream11 might see a 60% jump in its valuation with the secondary share sale that will give an exit to China’s Tencent Holdings, India’s Kalaari Capital, and Multiples Alternate Asset Management.
Dream Sports, the parent company of 12-year-old gaming app, is in talks with a bunch of new investors including Falcon Edge-managed Alpha Wave Incubation for a USD 300 million round, which will primarily see early backers selling their shares to new investors, a report by local media Economic Times (ET) said. Only a small amount of primary capital will be infused into the company.
Founded in 2008 by Harsh Jain and Bhavit Sheth, Dream11 is the largest gaming company in India with over 100 million users. Being an early mover into the segment, Dream11 offers real money fantasy games across cricket, kabaddi, NBA, hockey, and football. The company, which competes with MyTeam11, My11 Circle, Fancy11, Faboom, CricPlay, Fanmojo, and 11Wickets, among others, has raised about USD 325 million to date.
Last September, Dream11 had done a USD 225 million funding round at a valuation of USD 2.5 billion, on the heels of a demand surge for gaming platforms as billions of Indians had to stay indoors due to the COVID-19 pandemic. The previous year’s funding round also largely comprised of secondary sale transaction, according to the ET report. The deal saw VC funds such as Tiger Global Management, TPG Tech Adjacencies, ChrysCap, and Footpath Ventures come on the company’s cap table.
The development comes two weeks after online gaming platform Mobile Premier League raised USD 95 million in a funding round led by Composite Capital and Moore Strategic Ventures. This investment doubled the three-year-old startup’s valuation to USD 945 million.
For the last two years, Dream Sports has been expanding its offering to players beyond online games. In March 2019, it launched FanCode, a multi-sport aggregator platform offering news, live match scores, research-based insights, fantasy sports statistics, expert fantasy tips, game analysis, and access to engage with other sports fans.
In August 2020, FanCode launched an online merchandise store for fan gear of leading sports brands. Later in October, FanCode acquired a fantasy sports startup called FanDuniya, which offered users news coverage, statistical tools, and AI-driven models for making informed decisions during a fantasy cricket match.
According to industry lobby Federation of Indian Fantasy Sports, the user base for fantasy sports has grown exponentially in the last three years from two million in June 2016 to 90 million in December 2019.
“Indian fantasy sports industry…is growing at a CAGR of 32% and its worth is expected to be USD 3.7 billion by the year-end 2024,” said a whitepaper by Indiatech.org, an industry association. “The rapid growth in the uptake of fantasy sports spells out the sector’s immense potential for India, both from an investment and revenue perspective as well as job opportunities and contribution to sports enthusiasm that can turn around many sports in India that need attention.”