India's Dream Sports raises $400m, hits $5b valuation
Dream Sports, operator of India’s largest fantasy sports platform, has raised $400 million in funding led by TCV, D1 Capital Partners and Falcon Edge Capital. The post-deal valuation is nearly $5 billion.
The round – which also featured Tiger Global Management, ChrysCapital Partners, TPG Capital, Steadview Capital, and Footpath Ventures – facilitated an exit for several of the company’s early backers. Dream Sports has received six previous angel and institutional rounds, with Kalaari Capital and Multiples Alternative Asset Management supporting the business in its formative stages.
Kalaari and Multiples sold shares in the new round, while Tencent Holdings did not, Livemint reported. Tencent joined Kalaari and Multiples in a $100 million round in 2018, with Steadview investing $60 million a year later. In 2020, TPG, Tiger Global, ChrysCapital Partners, and Footpath led a $225 million round, comprising primary and secondary shares, at a valuation of $2.5 billion.
Fantasy sports, which involve users creating their own teams comprising real-life players participating in actual matches and score points based on on-field performance, have gained considerable traction in India. Sports betting is prohibited or restricted in the country. Fantasy sports platforms offer cash prizes, but they are deemed games of skill and therefore allowed to operate. However, some states have still banned the practice.
Most start-ups in the space offer a combination of fantasy sports and mobile gaming. Major competitors of Dream Sports include Mobile Premier League (MPL), which raised a $95 million Series D round at a post-money valuation of $945 million earlier this year.
A 2019 report by KPMG and the Federation of Indian Fantasy Sports (FIFS) projected that fantasy sports users in the country would total 100 million in 2020, up from 50 million in February 2019. Between 2016 and 2018, the number of platform providers and users grew sevenfold and 25-fold, respectively. Most users opt for free-to-play.
Founded in 2008 by Bhavit Sheth and Harsh Jain, Dream Sports is best known for Dream11, which claims more than 100 million users. They compete with other players through online leagues. Sports covered include cricket, football, kabaddi, basketball, hockey, volleyball, baseball, and handball.
The company operates under a freemium model, with users able to participate in free-to-play contests or pay a platform fee, which removes advertising and entitles successful entrants to a share of a winnings pool. Not all free-to-play contests have prizes.
Dream11 has partnerships with numerous professional sports leagues, but cricket remains its core offering. Former Indian cricket captain Mahendra Singh Dhoni serves as a brand ambassador and last year the company was the title sponsor for the Indian Premier League.
“India is home to the world's largest and most energetic sports fan base with a dynamic mix that is unique to the subcontinent. Dream Sports is serving this community with a highly innovative product offering,” said Gopi Vaddi, a general partner at TCV, in a statement. This is said to be the US-based growth-stage tech investor’s first commitment to an Indian start-up.
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