India's Dream Sports launches $250m corporate VC fund
Dream Sports, operator of India’s largest fantasy sports platform, has established a $250 million venture capital unit that will invest in sports, gaming, and fitness-tech start-ups nationwide.
The corpus will be deployed over the next 12-24 months, with target companies given access to Dream Sports' 125 million user base, as well as receiving industry insights, data, and operational support, according to a LinkedIn post.
The establishment of the VC unit, known as Dream Capital, comes as Dream Sports looks to diversify beyond online fantasy gaming. It recently invested $50 million in FanCode, a content and commerce platform that was incubated internally, while also launching payments business DreamPay, accelerator DreamX, and sports experiential platform DreamSetGo.
"We want to redeploy our EBITDA and re-invest further into inorganic growth because, while organic growth continues, we don't want to fall into that age-old trap of trying to do everything ourselves," Harsh Jain, co-founder and CEO of Dream Sports, told The Economic Times in a story referenced in the company's LinkedIn post.
He added that Dream Capital will make investments of between $1 million and $100 million, with an initial plan to back about 20 start-ups, each of which has the potential to achieve $100 million in annual revenue within five years. Eight investments have been made to date.
Dream Sports closed its most recent funding round at $400 million in March, achieving a valuation of nearly $5 billion. It has raised more than $750 million since its inception from the likes of TCV, D1 Capital Partners, Falcon Edge Capital, Tiger Global Management, ChrysCapital Partners, TPG Capital, Steadview Capital, Footpath Ventures, Kalaari Capital, and Multiples Alternative Asset Management.
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, led by the likes of Dream Sports and Mobile Premier League.
Dream Sports is best known for Dream11, which covers online leagues across cricket, football, kabaddi, basketball, hockey, volleyball, baseball, and handball. Users 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.
Nevertheless, fantasy sports remain controversial in India. With sports betting prohibited, they survive by virtue of being deemed games of skill. However, in some states they are still banned.
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