Dream Sports’ valuation may double to $4 billion
Mumbai: Dream Sports, which owns online fantasy sports company Dream11, is in talks with a clutch of investors—including Abu Dhabi’s Alpha Wave Incubation managed by Falcon Edge—for a fresh round of funding, valuing it at around $4 billion, three people in the know told The Economic Times.
If the financing, which is expected to be in the range of $300 million, goes through, it will almost double the company’s valuation in around six months. Sources indicated the funding will be through a secondary sale of shares by early backers with a small portion of capital coming into the company.
“Existing investors including the likes of China’s Tencent Holdings, Kalaari Capital, Multiples Alternate Asset Management are among the investors looking to sell their shares. The deal may involve some primary cash infusion but the final contours are still being worked out…” said a person in the know.
In September last year, Dream Sports, founded by Harsh Jain and Bhavit Sheth in 2008, had announced the closure of a $225 million funding round—which too was largely a secondary stake sale transaction. The financing saw the entry of New York-headquartered Tiger Global Management, TPG Tech Adjacencies, ChrysCap and Footpath Ventures into the company with Dream Sports’ valuation swelling to $2.5 billion.
At the time, Jain had told ET in an exclusive interview, “I wouldn’t expect any kind of primary raises anytime in future. You will hear of us more regularly doing secondaries, which is mainly for our very early shareholders.”
When contacted by ET for this story, Jain said, “We don’t comment on market speculation.” An email sent to Falcon Edge remained unanswered till Sunday evening press time.
For the Mumbai-based fantasy sports company and others in the online gaming industry, the Covid-19-induced lockdown has come as a big boost. With most live sporting events shelved in the early part of the pandemic and people staying indoors, the sector has seen a major bump-up in engagement on its platforms.
Earlier this month, Mobile Premier League said it is now valued at $945 million, as it more than doubled its valuation from its previous fundraise. The $95-million funding round was led by Composite Capital and Moore Strategic Ventures. Among MPL’s early investors is Times Internet, a part of the Times Group, which publishes this website.
Last year, Dream11 had snagged the title sponsorship rights of the Indian Premier League (IPL), having put in a bid of Rs 222 crore. But the company is going beyond live events as it pushes the pedal on diversification.
Dream Sports, the parent firm, launched FanCode, a multi-sport aggregator platform which offers a mix of content, commerce, and community engagement. It has also stepped into the fiercely competitive payments segment with Dream Pay, which caters to online merchants who can use the platform for deposits, settlements and withdrawals.
Dream11’s rise comes amid regulatory uncertainty around the online fantasy gaming sector. While many states have held it as a game of mere skill, others such as Karnataka have recently said that they are weighing introducing a law to monitor online games in the state. Niti Aayog, however, has proposed a uniform national level guidelines for the industry along with setting up a self-regulatory body.