Dream11 parent secures $225 million in fresh funding
The funding, which is largely secondary in nature with a smaller primary component, is expected to result in the further reduction of Chinese gaming and social media giant Tencent Holdings’ stake in the company to single digits, sources told ET. The investment values Dream Sports at about $2.5 billion, said people with knowledge of the matter.
by Gaurav Laghate
Mumbai & New Delhi: Dream Sports, the parent company of India’s leading online fantasy sports company Dream11, secured fresh funding of $225 million from Tiger Global Management, TPG Tech Adjacencies (TTAD), ChrysCapital and Footpath Ventures. Dream11 recently acquired the title sponsorship rights for this year’s Indian Premier League (IPL) tournament for Rs 222 crore.
The funding, which is largely secondary in nature with a smaller primary component, is expected to result in the further reduction of Chinese gaming and social media giant Tencent Holdings’ stake in the company to single digits, sources told ET. The investment values Dream Sports at about $2.5 billion, said people with knowledge of the matter.
At least two other early investors in Dream Sports, Kalaari Capital and Renuka Ramnath-led private equity firm Multiples Alternate Asset Management, are also believed to be shedding a portion of their stakes. Tencent had led the D funding round of $100 million in September 2018, along with investors such as Kalaari and Multiples.
Additionally, the investment by New York-headquartered Tiger Global Management is its third in an Indian unicorn in the calendar year. Tiger Global announced investments in ed tech company Byju’s in January and online food delivery firm Zomato earlier this month.
ET first reported in February and March that ChrysCap and TPG were looking at investing in the company. Homegrown private equity firm Kedaara Capital had also shown interest in the 11-year-old company as did Lupa Systems, the private investment arm of News Corp scion James Murdoch, ET had reported.
Apart from being title sponsor, Dream11 is also co-presenting sponsor for the IPL on Star Sports with an estimated outgo of Rs 100 crore. The event starts September 19 in the United Arab Emirates.
“We are excited to welcome our new partners, who share our passion for sports and have extensive experience in building highly valuable tech companies in India,” said Dream Sports CEO and cofounder Harsh Jain. The company had grown beyond fantasy sports to sports content, merchandise, streaming and experiences in the past two years and “there is much more to come,” he said.
Dream Sports also owns multiple-sport aggregator and fan engagement platform FanCode as well as sports accelerator company DreamX.
The company raised $60 million from Steadview Capital in April last year, making it the first Indian sports startup to join the coveted unicorn club.
Avendus Capital was the financial advisor to Dream Sports on the latest transaction.
“The sports sector has high growth potential in India,” said TPG managing director Akshay Tanna. “There is a significant opportunity to enhance the fan experience and we are excited to partner with Dream Sports to leverage technology in ways that will deepen the connection between Indian fans and the sports they love.”
Launched in 2008 by Jain and Bhavit Sheth, Dream Sports has grown from one to multiple brands and from 200 employees to over 450 in the past two years. “I am proud of our lean yet highly efficient team that has been the driving force behind the creation of ‘sports tech’ as a new industry category in India,” said Sheth, COO.
Fantasy sports has grown rapidly in the past few years in India. As per industry estimates, there are close to 100 million players in the country, out of which 82 million use Dream11. As per Jain, the overall potential in the next two years is going to be around 250 million users in India. The growth of the sector has also resulted in mushrooming of companies in the sector. From around 30 in 2016, the fantasy sports sector now has over 200 companies.