Dream Sports Raises $840 Mn At $8 Bn Valuation

Sportstech unicorn Dream Sports which runs fantasy gaming platform Dream11 has raised $840 Mn in a funding round led by Falcon Edge, DST Global, D1 Capital, Redbird Capital and Tiger Global at a $8 Bn valuation. 

The round also saw participation from existing investors like TPG and Footpath Ventures, making it amongst the largest investments globally in the sports tech sector.

In a statement, the company said that with an existing user base of 140 Mn Indians, it aims to be one of the world’s largest sports ecosystems which includes sports content, commerce, experiences, fan engagement (including sports gaming and esports), web 3.0 solutions, fantasy sports and fitness tech. 

Earlier this year, Dream Sports announced a corpus of $250 Mn for its CVC and M&A arm, Dream Capital to back startups in the segment. Dream Capital has built an initial portfolio of 10 companies, largely focusing on thematic early stage investments in India, including, Fittr, SoStronk, KheloMore and Elevar. 

Dream Capital is now expanding its sports, fan engagement and fitness portfolio in India and globally, it said.

Commenting on the investment, Harsh Jain, CEO and cofounder, Dream Sports said, “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.”

Founded in 2008 by Harsh Jain and Bhavit Sheth, Dream Sports has several brands under its portfolio including Dream11, Dream Capital, FanCode, DreamSetGo, Dream Game Studios, and DreamPay.

In March 2021, Dream Sports had completed a $400 Mn secondary investment round led by TCV, D1 Capital Partners and Falcon Edge. This investment helped Dream11’s valuation inch closer to $5 Bn. 

The company had become the first Indian fantasy sports unicorn in 2019. It counts Tiger Global, ChrysCapital, TPG Growth, Steadview Capital and Footpath Ventures, amongst its investors.

Legal & Regulatory Issues

The development comes at a time when the fantasy gaming major along with its peers are facing several legal hurdles amid regulatory uncertainties.

In October, Dream11 announced the suspension of its operations in Karnataka after a complaint was lodged against its founders — Bhavit Sheth and Harsh Jain.

The complaint was filed on the backdrop of the ban imposed by the state government on online gaming involving betting and wagering.

In September, Karnataka Home Minister Araga Jnanendra tabled the Karnataka Police (Amendment) Bill, 2021 in the the state’s Legislative Assembly, to ban online gaming or betting by amending the Karnataka Police Act of 1963, with maximum imprisonment of three years and a penalty of up to INR 1 lakh. The law came into force in the first week of October.

In August, Tamil Nadu had also floated an ordinance to prohibit games of skill (if played for stakes) as wagering or betting in cyberspace which led to online gaming companies scrambling to obtain a stay.

Later, the Madras HC struck down the amendments as overbearing, arbitrary and pernicious and is said to be working on a viable framework for all stakeholders.

Sunrise Sector

The investment into Dream Sports comes at a time when the sector is fast growing. The online gaming market in India grew at a CAGR of 17.3%, from $543 Mn in 2016 to $1.027 Bn in 2020. India also moved to the top global spot in mobile game downloads in the first nine months of 2020 with 7.3 Bn downloads.

Another fantasy game major Mobile Premier League (MPL) turned into a unicorn in September as it closed its Series E round by raising around $150 Mn from Legatum Capital, Accrete Capital and Gaingels LLC, at pre-money valuation of $2.3 Bn.