2019 may be the biggest year for this 11-year old Indian gaming startup
Dream11founders tell Business Insider that they expect a huge spike in users this year
- Two big sporting events-- the IPL and the cricket world cup-- in 2019 may drive boost user interest in the country’s biggest fantasy gaming site.
- The business prospects got a big fillip after the country’s cricket regulator, BCCI, declared Dream11 as the official partner for the upcoming cricket league.
- Reports suggest Steadview Capital may invest another $100 million in the company this year to make it India’s first gaming unicorn.
AdvertisementBhavit Sheth and Harsh Jain used to spend a lot of their time playing fantasy games for the English Premier League. And when the Indian Premier League began in 2008, the two 22-year olds realised that it was time to turn their obsession into a business – and the fantasy gaming site Dream11 was born.
Today, 11 years later, the Board of Control for Cricket in India has declared Dream11 as the official partner for fantasy games during the upcoming season of the IPL, and arguably the country’s biggest sports icon right now, Mahendra Singh Dhoni, is their brand ambassador.
Now, the founders are gunning for the coveted tag of a unicorn – a company that is worth at least a billion dollars. With the IPL and the cricket World Cup lined-up over the next three months, 2018 may be a big year for Dream11. “We expect to have 90 million users by the end of the World Cup and 100 million by the end of 2019.” Sheth told Business Insider.
The Indian fantasy gaming industry is projected to be a ₹118.8 billion market by 2023. While cricket holds the majority of the market share, other games too are picking up. At Dream11, 85% of their users play fantasy cricket while other sports like Kabaddi, basketball and hockey are picking up.
The startup last raised $100 million in a Series D round at a valuation of a reported $750 million. Its investors include Tencent, Kalaari Capital and private equity firm Multiples Alternate Asset Management. In March 2019, there have been reports about Steadview Capital looking at infusing $100 million into the startup taking its valuation to over $1.3 billion and making it India’s first gaming unicorn.
Dream11 has 52 million users who compete with each other on the site. The users assemble players from different teams to create a virtual line-up of their own, alongside an actual match. Based on the performance of their chosen players on the field, the virtual gamers are ranked on the virtual leaderboards.
“We started off as a free-to-play site, trying to get revenue through ads. Three years into the business, we saw that with a niche product like ours which doesn’t have millions of page views, ads were just hampering the user experience on our app,” said Sheth.
So, they changed the format. They allowed users to select their players not for the entire season at one go but only for daily matches. But they still hadn’t solved the question - how do they make money? That’s when they came up with the idea to ask users to pay and then they would pool in the money and award the winner.
“But we weren’t sure if it was legally allowed in India. After consulting with many lawyers and one-and-a-half years of research, we knew that since this was a game of skill, there were no legal issues,” said Sheth. The Punjab and Haryana high court declared the Dream11 format of fantasy sports as legal and one that requires considerable skill and judgment. This judgement was further ratified by the Supreme Court
When in 2014, Dream11 raised its first round of funding they still had just 300,000 users. But thanks to the popularity of IPL, today they stand at 52 million users. In fact, after signing former Indian cricket team captain MS Dhoni as their brand ambassador, just during the 2018 IPL their user base went from 20 million to 40 million.
AdvertisementTheir initial 10 million users were dominated by Tier 1 cities but now 50% of their traffic comes from Tier 2,3 and 4 cities.
“As 22-year-olds we started this business, engineers who didn't know anything about business. We didn't even in our wildest imagination think that we will have over 52 million users in such short time, with only a team of over 200 managing them and be at this scale,” said Sheth.
Gaming startup Dream11 strikes gold as the official partner of IPL
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