Dream11-Backed Rario’s Founders On Their Way Out As Investors Exert More Control

Amid an internal tussle with investors, the founders of cricket NFT startup Rario, Ankit Wadhwa and Sunny Bhanot, are reportedly exiting the company. 

The investors of the platform, including gaming giant Dream11, are pushing CEO Wadhwa and CTO Bhanot out of the company in a bid to exert more control over the operations of the firm, Techcrunch reported citing sources. 

As per the report, the NFT platform is also culling multiple roles as part of a wider restructuring exercise as investor Dream Sports looks to cut corners across the board. People familiar with the development also said that Dream Sports is also negotiating many of Rario’s licensing deals as it looks to cut expenses. 

It is pertinent to note that Rario currently has a slew of partnerships with names such as Sachin Tendulkar, IPL franchisees Gujarat Titans and Punjab Kings, Cricket Australia, and Lanka Premier League. These entail a heavy cost for the company. 

Dream11 declined to comment on the story. Inc42 has also reached out to Rario on the reported development and the story will be updated on receiving a response. 

Founded in 2021 by Sunny Bhanot and Ankit Wadhwa, Rario enables cricket fans to own digital collectibles like player cards, video moments, and cricket artifacts. 

Apart from Dream11, the startup is also backed by Alpha Wave Global, Web3 investor Animoca Brands, Presight Capital, and Tendulkar. 

A Troubled Story

The startup raised a mega $120 Mn at the height of NFT mania last year when a host of homegrown players looked to piggyback on the popularity of these tokens to grow their scale. But as 2022 unravelled, the government imposed a 30% tax rate on income from exchange of virtual digital assets. This broke the back of the ecosystem as the popularity of NFTs suddenly waned. 

Making matters worse could have been expensive partnership deals with multiple cricket boards and tournament organisers to woo users. On top of that, the company has been in the line of fire of a consumer rights body called Consumer Online Foundation over alleged violations of the Prevention of Money Laundering Act (PMLA), 2002.

The body even wrote to finance minister Nirmala Sitharaman seeking a probe into the startup’s business and compliance with local laws. 

As if this was not enough, the cricket NFT startup was also embroiled in a legal case with Web3 fantasy platform Striker. Rario had approached the Delhi High Court (HC) seeking to block Striker from minting and distributing NFTs that comprised cricket players with whom Rario had exclusive agreements with. However, the HC refused to issue an interim injunction on its plea. 

Meanwhile, the Indian startup ecosystem continues to reel under the effects of the ongoing funding winter. Rario and Dream11’s bid to rationalise costs and employees is in line with the overarching theme prevalent among Indian startups as they look to slash costs and shelve expansion plans.