Dream11 Plans Out Successful Exit For Early Backers Kalaari, Multiples & Think

Mumbai-based fantasy gaming unicorn Dream11 has decided to give up on fundraising through primary funds, but will focus more on secondary transactions from now to provide successful exits for its early backers — Kalaari Capital, Multiples Alternate Asset Management, Think Investments and others.

According to an Economic Times report, the existing investors have been shedding portions of their shareholdings in Dream11 since 2018. Commenting on the same, Dream11 cofounder Harsh Jain, “I wouldn’t expect any kind of primary raises anytime in future. You will hear of us more regularly doing secondaries, which is mainly for our very early shareholders.”

They also sold their shares during the latest funding round where the fantasy gaming unicorn raised $225 Mn at $2.5 Bn valuation from Tiger Global Management, TPG Global, Chrys Capital and Footpath Ventures earlier this week. The transaction too was majorly through secondary shares, instead of primary shares.

Jain also highlighted that they had started talks with the said investors back in January and the deal had closed in March. However, the formal signing of the documents was delayed because of the Covid-19 pandemic. Jain elaborated that there was no certainty in the sports calendar, therefore decided to wait for it.

Once the sports calendar became clear in July-August, the company decided to formally close the deal at the same deal terms. The fantasy sports company has decided to stretch it to September to include the amount to fund the Dream11 Indian Premier League (IPL) 2020 bid which closed at $33.5 Mn (INR 222 Cr).

Dream11 became the first Indian startup to become the title sponsor of IPL, replacing China-based smartphone manufacturer Vivo. Dream11 was already an official partner and sponsor of the IPL, but the title sponsorship rights are a step up for the company.

With this, the company’s name will be displayed on umpire’s jerseys and various other branding material for the league such as stadium tickets, billboards, fan merchandise, among other things. The league’s name itself is rebranded to include the name of the title sponsor, as in ‘Dream11 IPL’. The company has reportedly raised $500 Mn across several funding rounds and counts Steadview Capital and China-based Tencent Holding.

Founded in 2008 by Harsh Jain and Bhavit Sheth, Dream11 offers games of skills in the fantasy sports games genre for cricket, football, kabaddi, and National Basketball Association (NBA) games. It claims to have over 82 Mn players so far for its pay-to-play format, which has real cash rewards for winners. Dream 11 earns revenue by charging a platform fee from players for each match.