PE Firm Kedaara Capital Enters Fray Of Potential Investors For Dream11

Private equity firm Kedaara Capital has entered the fray as a potential investor in Dream11, a fantasy sports platform. The online gaming unicorn had announced its plans to raise $150-200 Mn in funding at a $2-2.2 Bn valuation before the coronavirus lockdown, however, it put those plans on a back burner. 

Kedaara will compete with other private equity firms such as TPG, Advent International, James Murdoch’s Lupa Systems and Chrys Capital, which have already evaluated the investment opportunity. 

The company plans to accommodate 3-4 investors in this round. In April 2019, Hong Kong and London-based investment firm SteadView Capital picked up a stake in Dream11 for $60 Mn, catapulting the company into the club of Indian unicorns, which are startups with a valuation of more than $1 Bn. Dream11 is the official gaming partner of the Indian Premier League (IPL), and the Board of Control for Cricket in India (BCCI). 

Founded in 2008 by Harsh Jain and Bhavit Seth, Dream11 also counts Chinese internet company Tencent Holdings as a major investor, after it raised $100 Mn from the WeChat parent company in 2018. The company has had five funding rounds since its inception. 

The company’s upcoming planned funding round will be the largest capital raise till date for the company. According to an Economic Times report, this will predominantly be a secondary sale of shares providing a partial exit to Vani Kola-led Kalaari Capital, Renuka Ramnath-founded Multiples Alternate Asset Management and San Francisco-based Think Investments.

Dream11 claims to have more than 8 Cr users on its platform, participating in a range of cash contests while playing fantasy sports such as cricket, hockey, football, kabaddi and basketball. Users on the platform can pick one of the many matches that are scheduled, and then proceed to put their knowledge of the game on use by picking a fantasy team. Based on the outcome of the fantasy match, users can win money if their predictions are right. The company earns revenue by charging a platform fee from users for each match. 

India’s ‘games of skill’ market includes BalleBaazi, WinZO Games, CricPlay among others. 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%.