Dream11 Doubles Valuation In 6 Months, Raises Funds At $5 Billion Valuation

Dream11 is having a bit of a dream run of late.

After touching the $1 billion valuation mark in April 2019 and becoming a unicorn, and then raising Rs. 1600 crore last September at a valuation of $2.5 billion, Dream11’s latest fundraise has valued it at $5 billion. The company has closed a $400 million funding round led by marquee global technology investors like TCV, which was an early investor in Netflix, D1 Capital Partners and Falcon Edge. This has doubled Dream11’s valuation in a matter of 6 months, and puts it among the five most valued startups in India.

“This is a huge vote of confidence to the Indian start-up ecosystem,” said Dream11 co-founder Harsh Jain. “We have created the Fantasy Sports category in India to drive digital engagement to real-life sporting events and bring fans closer to the sport they love. We are proud to continually contribute to the overall expansion of the Indian sports ecosystem,” he added.

Like other companies, Dream11 had been hit when sports events were cancelled because of the pandemic, but pushed hard when it had the advantage, dishing out Rs. 222 crore to sponsor the IPL. The recently-concluded IPL had been called the Dream11 IPL, giving the company unprecedented visibility among its target audience. The company’s users have increased 33% from 75 million before the pandemic, to 100 million now. “We were hit during the March-June period last year. July onwards, we started coming back to normalcy but even now quite a few tournaments have been canceled. So, we are still 80% (of pre-Covid-19 levels) but fantasy sports now has scaled up to a point where we have real revenue and we have just crossed 100 million users,” Jain added. Dream11 is also now reportedly profitable — which is a rare feat in the Indian startup ecosystem — but CEO Jain didn’t share details.

While Dream11 is currently flying high, there might be some grey clouds on the horizon. Concerns have been raised around whether its fantasy games are the same as gambling, and this appears to have made the company course correct — its TV ads now carry the disclaimer that its games could be addictive, and could cause people to lose money. Government think-tank Niti Aayog has also proposed national level guidelines for the sector, along with suggestions of setting up a self-regulatory body. But it would appear that the fantasy gaming sector might now be too big for regulation to have an impact — it would be a complete no-no for a cigarette company to be sponsoring cricket tournaments these days, but Wills had sponsored the cricket World Cup in 1996, and cigarette companies continue to flourish now even with curtailed advertising. Dream11 has positioned itself as India’s top fantasy games app, and even if curbs are put on the sector going forward, it can still make the most of the head-start it’s already received.