Unicorn startups were so named because they were few and far between, but they aren’t particularly rare anymore — India has already minted 27 of them this year. But while there’s now no shortage of unicorns, there’s still the rarified space of unicorn startups which also manage to be profitable.
Dream11 has registered profits of Rs. 180 crore in FY20, making it one of the handful of Indian unicorn startups that turn a profit. Dream11 saw its revenue increase 2.5 times from Rs. 775.5 crore in FY19 to Rs. 2070 crore in FY20. But while the company had registered losses of Rs. 87 crore in FY19, it earned profits of Rs. 180 crore in FY20. This is amongst the highest profits ever earned by an funded startup in India.
Dream11 has been one of the few startups which have appeared to flourish during the coronavirus lockdowns. The company had become a unicorn with a valuation of around $1 billion in April 2019, and had then gone on to raise money at a valuation of $2.5 billion in September 2020. Since then, Dream11’s growth has been even more remarkable — six months later in March, Dream11 again doubled its valuation, this time raising funds at a valuation of $5.6 billion.
It’s not surprising that investors are enthused with Dream11’s prospects. Dream11 operates in the fantasy games space, and the biggest hurdle to its growth could’ve been an adverse ruling from Indian courts around whether fantasy games constitute gambling, which is illegal. But it appears that fantasy games now have the go-ahead to operate, and Dream11 has the advantage of having had a headstart — by being the first major company to enter the space, signing on top cricketers including MS Dhoni and Hardik Pandya as brand ambassadors, and through big-ticket sponsorships including the IPL, Dream11 has cemented its place as one of the top destinations for fantasy sports in India. And the company now seems to be a money-spinner — it makes money each time fantasy games are played on its platform, and its only expenses are technology costs and salaries.
It’s a business model that few Indian unicorns have managed to emulate — most e-commerce companies run into losses of thousands of crores, and companies like Zomato and Swiggy barely manage to break even on each order. Some unicorns, such as Cred and Sharechat, don’t yet have a clear revenue model.
Amidst all this, Dream11’s Rs. 180 crore profit stands out. Only a handful of startup unicorns have managed to be profitable — in 2018, Policybazaar was the only startup unicorn which made a profit, netting in Rs. 10 crore. In 2019, Byju’s had registered net income of Rs. 20 crore, and Nykaa has registered profits of Rs. 62 crore this year. Dream11’s Rs. 180 crore is head and shoulders above all these, and the company is showing that India’s startups aren’t just managing to reach sky-high valuations — they’re also beginning to make money while doing so.