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Dream11’s Latest Funding Round To Include TPG, Chrys Capital, Lupa Systems

Dream11’s Latest Funding Round To Include TPG, Chrys Capital, Lupa Systems

Dream11 is in talks to raise $150 Mn-$200 Mn in fresh funding

The round may value the company at $2.25 Bn

Dream11 claims to have over 75 Mn players

Ahead of the 2020 Indian Premier League season, Mumbai-based fantasy gaming startup Dream11 is in the final round of negotiations to raise funding from global private equity firms TPG, Advent, James Murdoch’s Lupa Systems and homegrown Chrys Capital.

An ET report claimed that TPG will be using its Tech Adjacencies Fund, Advent International’s arm Sunley House Capital Management is also expected to join the consortium. Further, existing investor Tencent may double down on its investment in the company. The company is said to be signing final documents this week, followed by a round of confirmatory diligence. An official announcement is scheduled for the month-end, right before the IPL kicks off on March 29.

The funding round of $150 Mn-$200 Mn is reportedly a secondary sale of shares, providing an exit to Kalaari Capital,  Multiples Alternate Asset Management and Think Investments. A small primary infusion may also be done. Avendus Capital is the financial advisor on the deal.

Recently, Dream11 was speculated to be raising $500 Mn in funding, which will be led by Tiger Global. An unconfirmed Livemint report said that Tiger Global will acquire new shares and also secondary shares from Dream11’s existing investors such as Kalaari Capital, Think Investment and private equity firm Multiples.
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 75 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.
 It has raised over $100 Mn from investors such as Steadview Capital, Think Investments and Multiples Equity, and joined the growing unicorn club in April 2019.
Last year in April, the company said that its user base has grown at a CAGR of 230% over a period of three years. Founder Bhavit Sheth had told Inc42 last year that the company had 1 Mn concurrent users in IPL 2018 and was expected around 2 Mn-3 Mn in 2019. With IPL 2020 scheduled for March, Dream11 is further expected to rise up the charts.
In FY2019, Dream11 India reportedly had revenue of INR 800 Cr, from INR 230 Cr in FY18. However, losses reportedly widened to INR 130 Cr, from INR 65 Cr in FY18. For Dream11, its core fantasy gaming market is seeing undisputable fast growth in the country anyway.
India’s ‘games of skill’ market includes BalleBaazi, WinZO Games, CricPlay etc. According to the Evolving Landscape of Sports Gaming in India report, the fantasy sports industry is already worth INR 43.8 Bn and is said to reach INR 118.8 Bn by FY23 with a growth rate of CAGR 22.1%.