Dream11 parent touches $5-bn valuation after $400-mn secondary fund raise

Dream Sports founders Harsh Jain and Bhavit Sheth
Sports technology company Dream Sports, with brands such as Dream11, FanCode, DreamX, DreamSetGo, and DreamPay in its portfolio, has raised $400 million in a new funding round led by TCV, D1 Capital Partners, and Falcon Edge Capital.  This is TCV’s first investment in India. The latest round takes the company’s valuation close to $5 billion, revealed sources.

This secondary round also saw participation from existing investors like Tiger Global, ChrysCapital, TPG Growth, Steadview Capital, and Footpath Ventures. Falcon Edge Capital, co-founded by Navroz Udwadia, invested via Alpha Wave.

A secondary funding round means the company does not get any money. The fund goes to the existing investors who divest their stake in the company.

According to reports, while a few early investors, such as Kalaari Capital and Multiples Alternate Asset Management, have sold parts of their stake in the company for a high return, no one has exited the company in this round.

Dream Sports had raised $225 million at a valuation of $2.5 billion in September last year. With the valuation doubling to around $5 billion now, Dream Sports joins the list of most valued start-ups of India, such as Paytm, Byju’s, Zomato, and Oyo.

“This is a huge vote of confidence to the Indian start-up ecosystem. 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,” said Harsh Jain, chief executive officer and co-founder, Dream Sports.

Avendus Capital was the exclusive financial advisor to Dream Sports on the transaction.

For several years, the Mumbai-based firm, co-founded by Jain and Bhavit Sheth in 2008, failed to attract investors and remained entangled in legal battles as virtual betting or fantasy sports was considered illegal in India. However, a favourable court order in 2017 removed legal hurdles ahead of it.

“India is home to the world’s largest and most energetic sports fanbase with a dynamic mix that is unique to the subcontinent. Dream Sports is serving this community with a highly innovative product offering. We are inspired by what Harsh, Bhavit, and the Dream Sports team have built, and we look forward to partnering them,” said Gopi Vaddi, general partner at TCV, which has invested in global technology giants like Netflix, Airbnb, and Godaddy.

Interestingly, Dream11 is not available on the Google Play Store, but has a userbase of 100 million. It was the lead sponsor for the Indian Premier League last year after bidding $30 million for the spot.

Access to affordable smartphones, low network data tariffs, and improving mobile internet speeds have led to a spurt in the online gaming userbase in the country. The onset of the Covid-19 pandemic also brought about a significant shift in mobile usage and consequently in mobile gaming too. India has become home to one out of 10 mobile game users in the country, said an InMobi report.

The online gaming sector has seen a lot of action lately. Recently, the Mobile Premier League raised $95 million in a Series D round and is on the verge of becoming a unicorn, with a current valuation of $945 million. Mobile gaming company Nazara Technologies became the first gaming firm in India to get listed. The initial public offering mopped over Rs 260 crore from anchor investors even before the listing.

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