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Tencent Leads $100 Mn Series D Funding In Dream11 To Enter Indian Gaming Industry

Tencent Leads $100 Mn Series D Funding In Dream11 To Enter Indian Gaming Industry

Existing investors, including Kalaari Capital and Multiples Alternate Asset Management, also invested in the funding round

It has been speculated that Dream11 has been valued at $750 Mn in the latest funding

Tencent was looking to invest $5 Mn-$15 Mn across segments such as gaming, content, social media, and consumer lending in India

With the online gaming industry in India poised to reach $1 Bn by 2021, Mumbai-based fantasy gaming startup Dream11 has raised $100 Mn in a Series D funding round led by Chinese Internet conglomerate Tencent.

Existing investors, including venture capital firm Kalaari Capital and private equity firm Multiples Alternate Asset Management, also invested in the funding round.

The development was first reported by The Ken. A Dream11 spokesperson confirmed the development to Inc42.

The move comes after reports surfaced in April speculating that Dream11 may raise funds from Tencent at a valuation of $400-450 Mn. 

Founded in 2012 by Harsh Jain and Bhavit Sheth, Dream11 offers its users fantasy gaming in categories such as cricket, football, kabaddi, and National Basketball Association (NBA). It claims to have 20 Mn users and enables them to showcase their sports knowledge through fantasy gaming.

In an email interaction with Inc42, the Dream11 spokesperson said, “At Dream11, we are continuously working to help casual sports fans engage deeper with their favourite sports and become core sports fans. Our aim will be to maintain a consistent growth trajectory. We will invest in technology, people and expand our product offering to provide the best-in-class sports experience to our users. “

Currently, Dream11 has around 4.1 Cr users and is set to grow to 10 crore users by 2019. Our goal is to create awareness around fantasy sports in India and keep getting more of India’s 800 Mn sports fans to play fantasy sports on Dream11.

Dream11 fans can create their own team of real-life players from upcoming matches in various sports and score points based on their on-field performance while competing with the other fans. The gaming company aims to reach 100 Mn users by 2020.

Kalaari Capital, Think Investments, and Multiples Equity are the marquee investors in Dream11. Recently, MS Dhoni joined Dream11 as its brand ambassador.

Tencent Bullish On Indian Startups

Inc42 had earlier reported that Tencent was eyeing booming early stage startups in India. The company was looking to invest $5 Mn-$15 Mn across segments such as gaming, content, social media, and consumer lending in the country.

Since its foray into the Indian ecosystem in 2015, Tencent has invested hefty sums in late-stage startups only. Its early bets include Practo, Hike, Flipkart, and Ola. Tencent has also placed its bets on music app Gaana and content aggregator Newsdog, among others.

Chinese ecommerce giant Alibaba and Japan’s Softbank have already made many big bets in the sector and are continuously scouting for more. It might be possible that Tencent’s diversification strategy aims to avoid further collision with these global giants and create an interesting mix in its portfolio.

According to a Crunchbase data analysis, in 2017, of 70 disclosed investments made by Tencent globally, 36% were directed towards early-stage ventures and 23% towards late-stage ventures while seed-stage funding made up about 3% of the known funding total.

Mobile Gaming Industry In India

India’s gaming industry is booming, with about 80% of the mobile gaming population comprising 18- to 35-year-olds. The share of older gamers has seen a rapid increase in recent times.

Earlier, reports stated that considering the huge potential of the country’s gaming market, Paytm-Alibaba and Tencent are actively exploring the space, which is packed with homegrown as well as international players.

Here are some quick updates about competitors of Dream11:

  • One97 Communications, the parent of digital payments company Paytm, in a joint venture (JV) with AGTech, a Hong Kong-based mobile games development company, invested $16 Mn in Gamepind Entertainment, a mobile gaming offering
  • Leading Indian gaming company Nazara Technologies has diversified its portfolio in the last seven months. Nazara recently expanded to Kenya through its subsidiary NZ World Kenya Ltd (NZ World) to launch sports betting, sports fantasy, sports arcade, and a Sports Real Money Quiz, starting with FIFA 2018. It also discloses its plans to launch an IPO worth $156.5 Mn towards the end of FY18.
  •  The Sachin Tendulkar backed gaming company Smaaash has acquired bowling company bluO Entertainment and SVM Bowling & Gaming

It has been estimated that India accounts for around 13% of the world’s online mobile gaming population. Also, a report by Flurry Analytics said that India currently ranks among the top five countries in the world for online and mobile gaming.

Another report by Frost and Sullivan said that the number of Indian gaming startups increased from 20 five years ago to over 250 in 2017.

With the $100 Mn funding from Tencent, Dream11 is all set to explore the fantasy gaming sector further and take on the likes of Nazara Technologies.