Dream Sports doesn’t anticipate elevating additional major funds however foresees more secondary transactions, as the corporate that owns on-line sports activities fantasy platform Dream11 appears to supply exits for its early backers, its chief govt mentioned.
The firm counts enterprise capital agency Kalaari Capital, Renuka Ramnath-led Multiples Alternate Asset Management and San Francisco-based Think Investments amongst traders. They have all been shedding parts of their shareholding within the 12-year-outdated firm during the last two years.
“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,” Harsh Jain advised ET in an interview.
Three of such shareholders — Kalaari, Multiples and Think which had come on board in 2015 — have bought shares within the newest spherical and can proceed to promote, mentioned the University of Pennsylvania and Columbia University alumnus.
Dream Sports, which was based by Jain and Bhavit Sheth in 2008, introduced the closure of a $225 million funding spherical on Monday, which was largely secondary in nature with solely a small portion of the proceeds going to the corporate.
After the closure of the spherical, which noticed the entry of New York-headquartered Tiger Global Management, TPG Tech Adjacencies, ChrysCap and Footpath Ventures into its cap desk, Dream Sports’ valuation has swelled to $2.5 billion.
According to Jain, the funding spherical, which was first reported by ET in its editions dated February 19 and March 9, was to be closed by March, however the formal signing of the paperwork was delayed due to the Covid-19 pandemic.
“We started talking to investors about this round in January, and by March, we had closed the deal and we were literally at a signing level. Then Covid-19 happened, so we decided that as there’s no certainty on the sports calendar, so let’s just wait for certainty to come back. Then by July-August, the sports calendar came back,” Jain mentioned.
“That’s why it stretched into a couple of weeks in September but at the same valuation, same deal terms as before. We just stretched it a little bit to include this amount to fund the Dream11 IPL bid. Even at a 50% discount, it (IPL deal) is $30 million,” he added.
In August, after Chinese smartphone firm Vivo determined to pause its title sponsorship rights of the IPL, Dream11 received the rights for the 2020 version of the league for Rs 222 crore.
The spherical had additionally seen vital curiosity from homegrown non-public fairness main Kedaara Capital, which had made a late bid to spend money on the corporate, and Lupa Systems, the non-public funding arm of News Corp scion James Murdoch.
The firm has by no means disclosed the precise quantity it had raised in fairness financing, however, in response to individuals within the know, it was a shade of $500 million, throughout rounds, until date.
It additionally counts India-focused, London-based funding agency Steadview Capital and Chinese Internet main Tencent Holdings as traders.
Jain mentioned the proprietor and operator of WeChat and the world’s fifth-largest Internet firm, didn’t take part within the major or secondary parts of the newest transaction. “Tencent owns a single digit percentage in the company,” he added.
Jain didn’t disclose the phrases of the secondary transaction.
He mentioned the Mumbai-headquartered firm would actively take a look at investments and doable mergers and acquisitions.
“We have a corporate development team, which is headed by Dev (Bajaj), who has five years of experience in private equity and six years as an entrepreneur. He is an ex-Kalaari partner and has joined us looking at all large investments and M&A,” Jain mentioned.
“Then we have DreamX, which is a sports accelerator. DreamX is going and investing and incubating or accelerating a lot of these sports startups to help them get off the ground,” he added.
Dream Sports can also be actively “experimenting” with completely different sports activities, apart from cricket, reminiscent of kabaddi and soccer.
“I think kabaddi is doing really well in India; Indian Super League (football) is also growing. Kabaddi, I really believe, could become as large as football,” Jain mentioned.
While the Dream11 app is now obtainable on Apple’s app retailer, Google’s Play Store nonetheless doesn’t permit fantasy sports activities apps, limiting its attain in India, its core viewers on condition that Android working system instructions over 95% of the market in Asia’s third-largest financial system.
Despite the limitation, Dream11 claims to have more than 82 million customers.
But Dream11, in response to Jain, is leveraging the Federation of Indian Fantasy Sports (FIFS), an trade physique arrange in 2017, and which claims to be the primary and solely trade physique shaped for the aim of self-regulation and to create standardised greatest practices within the fantasy sports activities gaming trade, to barter with the likes of Google.
“…Google Play Store has its own policy. So that’s why FIFS becomes very important,” Jain mentioned.
“They (FIFS) have their own board and there’s a CEO and that industry body is doing an amazing job to reach out and to talk to Google, to talk to these gatekeepers, including Facebook. To make it much easier for startups to start advertising on Facebook,” he mentioned, including that the trade physique “has its charter which everyone has signed to make sure that the lines between fantasy sports and sports betting are clearly defined”.