In one of the biggest funding rounds of 2021, Dream Sports, the parent company of online fantasy gaming platform Dream11, has landed a USD 840 million check from new and existing investors at a valuation of USD 8 billion.
Falcon Edge, DST Global, D1 Capital, Redbird Capital, and Tiger Global led the funding round for the 13-year-old gaming company, which also saw participation from TPG and Footpath Ventures.
With the recent financing—which is also among the largest investments in the sports tech sector globally—Dream Sports’ valuation has gone up by USD 3 billion in eight months. The company raised a USD 400 million secondary funding round in March, which valued it at around USD 5 billion.
The company plans to use the fresh funds to step up its efforts to create a comprehensive sports technology ecosystem, going beyond fantasy gaming that has been its core business so far.
“We are now doing sports commerce, data analytics, merchandise, and investing in sports startups,” said Harsha Jain, co-founder and CEO of Dream Sports, in an interview with local media Economic Times. “We see a massive opportunity in going deep into sports like kabaddi… beyond cricket… and that is what we are aiming to do with this funding.”
In a separate statement, Jain said Dream Sports aims 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 one billion Indian sports fans,” he added.
According to Rahul Mehta, managing partner at DST Global, Dream Sports’ vision to build an end-to-end sports tech company sets the company apart from other players in the segment.
Started by Harsha Jain and Bhavit Sheth in 2008, Dream Sports has emerged as India’s leading sports technology platform with a user base of 140 million. It was also the first Indian gaming startup to become a unicorn in 2019. The company posted profits for the financial year ending March 2020, becoming one of India’s few profitable consumer internet companies.
Over the last few years, the Mumbai-based company has diversified its offerings in a bid to become an end-to-end sports destination entailing games, content, commerce, experiences, and fan engagement.
Aside from Dream11, which offers online fantasy games across cricket, kabaddi, NBA, hockey, and football, Dream Sports operates sports content and commerce platform Fancode, sports experience platform DreamSetGo, payment platform DreamPay, and sports accelerator DreamX.
Earlier in August, the company incorporated corporate venture capital fund Dream Capital with a corpus of USD 250 million. Dream Capital has already backed ten early-stage startups, including Fittr, SoStronk, KheloMore, and Elevar. The company is now eyeing international markets for its sports, fan engagement, and fitness portfolios.
The funding comes at a time when fantasy sports firms are facing regulatory hurdles, which implies investors’ strong confidence in the booming gaming industry in India.
While the Supreme Court in August 2021 maintained that Dream11’s fantasy sports involve skill and cannot be considered gambling, a new bill passed by the southern state of Karnataka in early October banned online games of chance.
After the bill was enforced, Dream Sports maintained that the law does not apply to fantasy sports operators, which offer games of skill. However, the company suspended operations in the state on October 10 after an FIR was registered against its founders for offering gaming services on its platform despite the local government’s ban.
Karnataka High Court has granted partial relief to Jain and Sheth by directing the police not to take any coercive action against them until further court orders. Currently, Dream Sports, along with other gaming firms like Mobile Premier League, Junglee Games, and Adda52, do not allow users from Karnataka.
Skilled gaming industry body All India Gaming Federation and real-money gaming firms have filed petitions challenging the constitutional validity of the act that bans online games of chance.