Dream11’s Fantasy Run


Can Dream11’s longevity and focus on tech drive user loyalty in the fantasy sports arena?

It’s hard to escape the onslaught of fantasy cricket ads anywhere these days. The IPL 2023 spotlight has made it impossible to get by a day without bumping into Dream11, MPL, WinZO Games24X7’s My11Circle, MyTeam11 or even a CrickPe ad, featuring cofounder Ashneer Grover himself.

But this long list of names has created a new challenge for Dream11 in 2023. India’s first fantasy sports unicorn is now finally looking to bring its tech to the fore to find the competitive edge, in the face of new rivals that are looking to poach users and a share of their wallet.

Of course, that doesn’t mean an end to the colourful and star-studded fantasy cricket ads, but it’s just that after years of being in the market, Dream11 needs to step it up. And there are billions on the line when it comes to fantasy gaming. Can Dream11’s longevity and focus on tech drive user loyalty in the fantasy sports arena?

Before we head there, let’s take a look at some of the top stories from our newsroom this week:

  • OYO’s Premium Ambitions: As OYO eyes a slice of the premium hospitality market, there are plenty of headwinds along the way. Our in-depth analysis of OYO’s plans
  • Unicorn Valuation Bubbles: As valuations turn into elephants in the room for Indian unicorns, is it time to talk about revenue multiples seriously?
  • Salaries At The Top Of Fintech: Zerodha’s Kamath brothers lead the charts when it comes to the highest-paid fintech founders and CEOs in India. See the full list

Money Is No Fantasy 

Over 12K matches every year across 12 sports and growing, more than 500 Mn requests per minute during marquee tournaments such as the IPL and more than 150 Mn users — this is the scale of the market that Dream11 and others are targeting.

And this has attracted 200-plus startups and gaming companies into the fray, the company says. Naturally, money has followed. The Federation of Indian Fantasy Sports (FIFS), the self-regulatory industry body for fantasy gaming, says the market size is projected to grow from INR 34,600 Cr in FY21 to an estimated INR 1.65 Lakh Cr by FY25, clocking a CAGR of 38%.

One of the main sponsors of IPL, Dream11 reported 56% growth in revenue from IPL in the 2022 season compared to 2021. Games24X7’s My11Circle, which is also a title sponsor of IPL team Lucknow SuperGiants, clocked a 30% bump in revenue according to a Redseer report.

Overall revenue is expected to grow by 30%–35% to INR 2,900 Cr-INR 3,100 Cr during the ongoing IPL 2023, the research firm said earlier this month. Besides free users, the company expects more than 6.5 Cr Indians to transact on gaming platforms.

Redseer partner Ujjwal Chaudhry believes there has been a large awareness around fantasy sports platforms thanks to the higher marketing spend and the launch of new platforms such as cricketer Deepak Chahar’s Trade Fantasy game as well as Third Unicorn’s CrickPe. “There is now better clarity around GST as well [more on this below]. Another positive push has been from Google, where it has allowed some fantasy platforms on the Play Store. All of these are very positive developments for fantasy sports,” he said.

Availability on the Google Play Store has indeed solved the major distribution and trust hurdle that apps faced. The likes of Dream11, Games24X7’s My11Circle, MPL and others can make use of this to improve their reach and marketing ROI. Earlier, these companies had to rely on APKs distributed to various platforms to reach users and this also involved an element of risk.

According to Dream11, the company saw user concurrency (concurrent traffic) of 10.56 Mn on the first day of IPL this year and more than a million new users. Redseer’s Chaudhry added the IPL has had consistent user growth in the last 4-5 years. “Our estimates suggest that the average revenue per user is expected to grow from INR 410 in 2022 to INR 440 per user in IPL 2023,” he added.

Are Regulations Getting Clearer? 

What has also changed the game for fantasy sports platforms in recent weeks is the new IT Rules, which clarify regulations for online real money gaming to a large degree. For years, fantasy gaming startups have complained that regulators view them as gambling apps. The introduction of rules that empower SROs such as the FIFS is likely to change this narrative.

Reports also suggest that the government is likely to recommend 18% tax on the gross revenue or GMV of real money gaming platforms. This has been a long-standing demand, and many startups such as GamesKraft are stuck in tax litigation over GST uncertainty. We have written about the GST in gaming in detail, which is a good starting point to familiarise yourself with this issue.

Safe to say that if the government clarifies the GST clauses for real money gaming, it will be a major relief for startups such as Dream11 and others that are rolling in the money right now during the IPL. But it will also allow them enough operational breathing room to plan beyond the peak season.

Dream11 Beyond The IPL Rush

Questions remain as to what happens after the IPL. How will fantasy apps look to replicate the highs of this one month over the next 12 months? And can they even hope to, especially since the IPL looms largest in their businesses?

A Deloitte-FIFS report says India is the world’s biggest fantasy sports market and cricket is the dominant category. The report titled ‘Fantasy Sports: Creating a Virtuous Cycle of Sports Development’ says cricket is expected to grow the fastest at 30% CAGR over the next four years and remain the highest contributor to the overall revenue in the segment.

This would seem to indicate that IPL will become the main factor in yearly performance for most companies. Dream11 did not comment on the business outlook for the new year or indeed how the company looks to boost revenue beyond IPL.

Despite its revenue from IPL growing in 2022, Dream11’s overall profits fell 57% in FY22, as per its financials. The company’s total expenses rose 1.7X to INR 3,762.4 Cr in FY22 as its advertising expenses jumped to INR 2,158.3 Cr from INR 1,249.2 Cr in FY21.

Dream11 launched a huge ad campaign at the end of 2021, which featured several Indian cricketers such as Rohit Sharma, Rishabh Pant, Hardik Pandya, Jasprit Bumrah, and Shikhar Dhawan. It extended this campaign for IPL 2022, with 17 ad films featuring various Indian celebrities.

Despite its lower profits last fiscal, Dream11 is the only profitable unicorn in this space. Games24X7 slipped into the red in FY22, reporting a loss of INR 230 Cr. Meanwhile, MPL reported a 3X surge in its loss to $149.3 Mn in FY22.

The seasonality of revenue is something no platform is able to solve. So the next boost for revenue could come from Web3, NFTs, metaverse and the likes.

Next-Wave Of Fantasy Revenue

For instance, Dream11 says it is diversifying into Web3 and NFTs through partnerships with sports leagues, players and teams. Besides this, it has also forayed into UPI payments and rewards with the launch of DreamX.

“We want to build India’s capacity for innovation in areas like sports and sports-tech, gaming, Web3, fintech and fitness-tech, and aim to complement entrepreneurs with strategy, product, and marketing knowledge that is not typically accessible, especially at an early stage,” the company said.

Of course, Dream11’s parent also runs a venture fund that takes direct steps to invest in such opportunities. Web3 players such as the crypto-friendly EarnU forayed into India last year, but so far not much has been heard about its growth in the market.

As for its tech stack, Dream11 says it uses AI/ML models for testing scale, server load or stress and service efficiency.

“We have an in-house fraud detection system called FENCE (Fairplay Ensuring Network Chain Entity). Our ML models detect fraud movements and fake accounts on our app and ensure timely action is taken,” a spokesperson for the Mumbai-based unicorn said.

But technology as such does not seem to be a major USP for users of fantasy sports apps when it comes to choosing which games to play. A lot depends on which app is giving the most prize money or giving rewards to new users. But sometimes it’s just about which app is new.

Like Ashneer Grover’s CrickPe, which launched ahead of the IPL and claims to have seen 10 Mn downloads already. If these numbers are to be believed, there is no dearth of ways for the Dream11 rivals to grab new users or syphon away some of its users.

Besides this, like subscription fatigue, there are concerns about how much a user is willing to spend across all of these apps. Also, at the end of the day, is the longevity of a platform or technology critical for user loyalty in today’s crowded market?

What exactly makes users stick to platforms? That’s a critical question that Dream11 will have to answer in the next year or so.

Sunday Roundup: Startup Funding, Tech Stocks & More

  • ? Funding Down: Startup funding dropped 61% in the second week of April compared to the first week, as Indian startups collectively raised a total of $216 Mn across 18 deals
  • ? Zomato & Blinkit Hit: Blinkit delivery executives protesting changes in pay by Zomato found support from a BJP leader in Gurugram who urged authorities to immediately meet the demands of the gig workers

  • ? Tata’s Edtech Bet: At a time when edtech is struggling to keep up with the pressures of scaling up, Tata Digital is looking to enter the sector with NeuSkills, a reskilling product
  • ? JioCinema’s Warchest: Reliance Jio plans to release as many as 100 movies and shows on its OTT platform over the next 18-24 months with an INR 2,000 Cr warchest

We’ll be back next Sunday with more insights and a roundup of the top stories from the world of Indian startups. Of course, you can follow us on Instagram, Twitter and LinkedIn for the latest news as it happens.


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