Dream11 saw its valuation soar to around $2.5 Billion after bagging the rights for IPL’s title sponsorship, coupled with a new funding round. But more than money, the opportunity to sponsor the world’s biggest cricketing event brings newfound influence for the unicorn in the raging debate around the legality and future of fantasy sports in India.
The air has been cleared around the title sponsorship of the most awaited Indian Premier League (IPL). India’s leading fantasy sports platform, Dream11, has grabbed the title with a bid of Rs 222 Crores. The earlier sponsor, Vivo, paid Rs 430 Crore last year. However, the leading Chinese smartphone brand had to cancel its deal this year over anti-Chinese sentiments after the Indo-China border tensions arose back in June. According to a report, the other contenders for the sponsorship had included Tata Sons, Reliance Jio, Paytm, Unacademy and Byju’s.
Nonetheless, the change of brands does not mean that IPL’s title sponsor is free of Chinese money. Dream11 has a substantial investment from Chinese internet major Tencent Holdings. In addition to Tencent, it has received funding from US-based Steadview Capital, Kalaari Capital, and Multiples Equity. Amid recent criticism around Chinese investment, Dream11 clarified that it is a completely homegrown Indian brand. It also said that only one out of its five investors has Chinese origins and holds a minority stake.
The two runners up in the bidding process were Byju’s (Rs 201 crore) and Unacademy (Rs 170 crore). Earlier, there were talks that Tata Sons might be interested in taking the title sponsorship which could have given BCCI the space to nullify the criticism it had garnered after it declared the intent to keep Vivo on as the lead sponsor. Tata Sons decided against formally bidding for the open sponsorship space.
Dream Come True
Keeping aside the geopolitical aspect, the clinching of IPL’s title sponsorship is a massive exploit for Dream11. As per its current business model, the Indian unicorn start-up relies on the month-long T20 event to earn the major chunk of its revenue. Though it caters to a number of sports, Cricket remains the largest segment for Dream11. A few weeks back, investors and analysts were expecting a washout year for the fantasy game startup as the pandemic had brought uncertainty to the IPL. However, BCCI’s decision to hold a delayed event in the UAE came as an elixir of life for Dream11.
Founded by Harsh Jain and Bhavit Sheth in 2012, Dream11 currently offers a platform for fantasy gaming in multiple games, including cricket, kabaddi, and football. It has been an associate partner of the IPL for two years and is also an official partner of the International Cricket Council (ICC) and the National Basketball Association (NBA). One of the founders and current CEO of Dream11, Harsh Jain, is the son of Anand Jain, an aide of billionaire chairman of the Reliance conglomerate Mukesh Ambani.
Watch: Harish Jain – The man who brought fantasy sports to India
Dream11 is currently valued at more than $1 billion and has more than 50 million online users. It is now reportedly in talks with private equity giants TPG, Advent, Kedaara Capital, and Tiger Global Management for backing its further expansion plans.
We believe that ‘Dream11 IPL’ also perfectly defines what IPL is all about: every team fielding its Dream11 team culminating in the IPL finals determining The Dream11.Dream11 Co-founder and CEO Harsh Jain acknowledging the IPL title sponsorship
The acquisition of title sponsorship of the IPL gives a much-needed boost to Dream11’s business in a crisis-hit year. But more importantly, it also brings further credibility to Dream11 while the Indian government toys with the legality of fantasy games amid concerns and questions from different sections of the society.
The Legality Row
Over its eight years of business, Dream11 has had its share of legal wrangles. In 2017, one user took the company to the Punjab and Haryana High Court after losing money. The court’s ruling came as a relief when it clarified that Dream11’s offering is not gambling, but a game of skill. The court ruling gave momentary relief to the unicorn; but it didn’t remove ambiguity around legality of fantasy sports in India.
Watch: The legality of Online Fantasy Sports in India
Currently, there is no government regulation on the fantasy sports sector. In 2017, the Indian Federation of Sports Gaming (IFSG) tried to set up self-regulation standards for the industry. As of now, the legality of fantasy sports varies from state to state.
How Dream11 views itself?
Dream11 holds a majority of Indian fantasy sports markets. However, Jain never describes Dream11 as a gaming company. He likes Dream11 to be identified as a sports company. The doubts over legality have not stopped the company from adding users to its platform. However, the title sponsorship of IPL will further boost the users’ morale as well as confidence in a service which uses real money to play a virtual game. It will significantly increase the brand’s visibility and may help it to close the pending funding round too. As per Jain, Dream11 aims to promote sports fan engagement through its portal and build a player base of over 100 million in India.
Dream11’s dream is, of course, not limited to cricket. As of now, it hosts more than 3000 games a year, including games of cricket, football, kabaddi, basketball, and hockey. There is a vast, unpenetrated market waiting. The brand visibility and reliability may help the company to expand into motorsports, badminton, rugby, golf, volleyball, tennis, squash, and other sports in the future.