Dream11 – Dutch Uncles

Unicorns Launch Investment Arms To Fund Start-ups

Anju Nambiar — Wed, 18 Aug 2021 10:35:07 +0000

The unicorn club of start-ups in India have come a long way and have created history in the start-up world. After successfully filing for IPOs, they are now turning their attention to profitable investments within their community. By doing this, they want to create an independent investment wing for the industry they belong to. Thus, aspiring start-ups who are following in their footsteps can avail funding without the need to approach other investors or struggle to acquire funds.

What is a Start-up Investment Wing?

Start-ups which have raised the benchmark for the community and have reached high valuations are setting up a Venture Capital arm with a fixed corpus. These VCs are then identifying budding start-ups that belong to the same or similar industry and are displaying disruptive business models and million-dollar potential. Such VCs are called Start-up Investment Wings which are giving back to the start-up community.

Why are India’s unicorns turning VCs?

India’s unicorns are turning venture capital investors because the unicorn club in India is steadily growing with 16 more to be added to the pool in 2021 alone. By 2025, the total number of unicorns in India will cross the 100 mark. Existing unicorns in India like Paytm and Dream11 have developed an increased appetite for growth. They have also developed the need to tap into adjacencies which is pushing these unicorns to set up funds and turn investors.

Investment arms of Dream Sports and Paytm

DreamCap – $250 Mn Corpus

Dream Sports, the parent company of Dream11 (fantasy sports start-up) has rolled out a $250 Mn corpus to fund sports start-ups in India. This investment wing of India’s first gaming unicorn Dream11 will fund start-ups operating in the sports, gaming, and fitness tech spaces.

One97 Mobility Fund – $100 Mn Corpus

One97 Mobility Fund is Paytm’s investment wing with a $100 Mn corpus which is investing in mobile-first early-stage start-ups. They have invested in companies like Oorja Analytics, LeapSky Wireless, Ciqual, TenCube, and Singapore-based TheMobileGamer.

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Dream Sports, the parent company of Dream11 (fantasy sports start-up) has rolled out a $250 Mn corpus to fund sports start-ups in India.

What’s in it for me?

Investment wings of top unicorns in India have already invested $1.5 Bn in start-ups. The trend of unicorns investing in other start-ups kicked off when these companies discovered opportunities to invest in seed capital and early-stage funding. However, off-late, these unicorns are ready to invest in lucrative late-stage start-ups as well.

Indian unicorns have achieved the heights of success, making stellar IPO performances, and achieving billions of dollars in valuation. They are making strategic investments in the start-up world and have already invested in more than 90 start-ups.

Popular names in the unicorn club like Zomato, Zerodha, LensKart have invested in start-ups. But what’s common among their investment strategies is that they are funding their own kind of start-ups:

Zomato recently invested in Grofers since they are keenly interested in this segment.
LensKart launched a $20 Mn investment wing called LensKart Vision Fund which will invest in eyewear and eyecare start-ups.

To attract funding from one of these investment wings, your start-up must venture into or belong to one of their close-knit industries. Also, an important thing to note is that these unicorns are mostly interested in start-ups with the potential to become the next unicorns or give rise to the next wave of unicorns in India. ‘Baby unicorns’ with disruptive technology and the potential to reach $100 Mn in revenue in the next few years have a high chance of getting funded by Start-up VC funds.

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Dream11 – Altering Dreams to Reality

MARY KMENLANG KHYRIEM — Fri, 16 Jul 2021 12:35:08 +0000

Often, an idea is easier to perceive than being actually inculcated into becoming a reality. This is the story of one such idea, which was relatively easier to conceive but vastly challenging to be implemented.

The journey dates back to 2008, when two 22-year-olds – Harsh Jain and Sanghvi Bhavith Seth – took their common love for sports, which went beyond playing their favourite English Football Fantasy leagues every weekend, to the next level of creating India’s first fantasy sports start-up – Dream 11.

‘Young and Restless’: Building a Personal Project

Online fantasy sports have seen a massive adoption and immense market growth in India from the early 2010s due to large-scale availability of smartphones and high-speed internet.

And with the above as reference, we can see how the brand Dream 11 is the culmination of a personal project born out of sheer love for sports with young and restless entrepreneurial energy. While Jain was working as a marketing manager at an infrastructure and real estate company promoted by his father, Seth was testing the field with different jobs. The duo went on to complete their MBAs together in the US and decided to launch their start-up in 2008.

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Fantasy sports came into existence in early 2000 in the US and Canada. The ‘dream’ of launching a fantasy sports gaming platform in India was perceived parallely with the onset of the Indian Premier League (IPL).

Its introduction to the Indian market was in 2008 during the first season of the IPL. With the launch of Dream 11, Harsh Jain and Sanghvi Bhavith Seth wanted to cash in on market opportunity and gain the early entrant advantage.

But before Dream11 came into the picture, ESPN-Star’s joint venture in the fantasy gaming segment called Super Selectors was set up as the first fantasy gaming company in the country in 2001. Joy Bhattacharjya led the company. Super Selectors was a fantasy cricket game that was run by ESPN and Star Sports. It held contests ranging from a month to the duration of an entire series.

The Super Selectors concept involved picking a team of 11 players within a fixed budget where a set number of substitutions were allowed throughout the tournament and points were awarded based on players’ performances on the field. Players also had the ability to form mini-leagues with their friends. But despite good traction, the company was shelved in 2003. And fantasy sport ceased in India even before it could take off.

Things stayed that way for five years until two fresh college graduates, Harsh Jain and Bhavish Sheth, resurrected the segment through Dream11.

The Pivot

In 2008, Dream11 was launched as a free-for-all sports app where users discussed sports via community platform, read blogs and played fantasy games based on sports seasons. However, this ad-based and season-long format did not find much traction among users and lagged in growth. Besides, the scalability of the model was also under question.

In 2009, the start-up was running out of funds to sustain operations. The founders did not want to go back to their parents for money, and this was a make or break stage for the business. The company needed outside capital, which was a tough task for the founders as they were new in the market. Owing to meager revenues and low user interest, the company lost money for the first three years between 2008 and 2011.

In 2010, the duo ventured into a digital and media agency – Red Digital – on the sidelines of Dream 11. Out of 50 employees of Dream11, 40 were enrolled under Red Digital and asked to work in the new company. The decision worked in their favour as the duo managed to generate money to finance Dream 11 and resume its operations. In 2013, Red Digital was sold to Gozoop for approximately Rs. 7 crores.

During this period, the founders also got back to the drawing board to rethink Dream11 from the ground-up.

The real journey of the start-up began in 2012 with the launch of its freemium model, where users accessed free features up to a point, after which they were asked to pay. The primary focus was shifted towards daily matches. The users were able to put money on a team/player of their choice before the start of the match. Based on performances, points were accumulated and teams/players were ranked at the end and money was made by participants from the pool.

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Dream11 model charged an entry-level fee from the participants in paid contests besides taking a cut (commission) on the money made by the participants which accounted for about 15-20% of the total pool.

Another source that was expected to earn revenues was advertisement. However, the traffic to the website was minuscule besides the low rates. It did try on Google AdSense initially, but dropped the same for user convenience as it was already challenging to convert a free user into a paid one.

The Legal Hurdle

Dream11 faced a series of challenges for its legality in the courts of India. Avinash Mehrotra, a financial consultant, filed in demanding the Supreme Court to clarify regulations on governing fantasy sports, online gambling and betting websites. To date, Dream11 has overcome various legal challenges by gaining a series of state court rulings finding it to be safe within “skill gaming” protections.

For example, the Bombay High ruled in April 2019 that success in Dream 11 “depends upon the user’s exercise of skill based on superior knowledge, judgment, and attention… It is undoubtedly a game of skill and not a game of chance.” The Supreme Court later backed this ruling. Gambling laws in India are largely left to the discretion of each state, though most states have based their laws on the Public Gambling Act of 1867.

Over the years, fantasy sports have captured the Indian market by attracting consumers and affecting the different sectors of the market. It has also changed the psychology of the people towards e-sports. The sudden growth of sensation in viewers for fantasy sports increased the interest of people in watching different sports, which resulted in the enhancement of the importance of the online gaming industry and fantasy sports companies.

The ‘Real’ challenge

Dream11 faced a lot of challenges finding a reliable source of funding. In an interview, Jain had mentioned that they had approached more than 150 investors who refused to commit, before hitting the first funding.

Dream11 began its fantasy sports business with only a few thousand dollars, but it quickly expanded and acquired a series of angel investor investments. The amount of money needed to run the company was extremely high. But, thanks to their negotiating abilities, they were able to find some decent investment opportunities.

Nevertheless, they learned something new from every rejection which helped the founders make better decisions and use each penny wisely. According to Jain, the success of a business depends more on the execution of an idea than the idea itself.

During this time, the traction for fantasy sports was also picking up in the Indian market. And by the end of 2013, the duo managed to get their first round of funding Kalaari Capital.

Over 10 years, Dream11 has built the category from scratch in India and reaped the benefits of it. And today, it is the largest and most recognized OFS player in India with over 70 million users (a little more than 75% of the users of all other OFS players combined). In 2019, Dream11 generated a revenue of around Rs. 775 crore ($103 milion), a 250% growth over 2018 revenue of Rs. 224 crore ($30 million). Along their journey, the company was backed by marquee investors like Tencent (WeChat owner), Kalaari and Steadview Capital. In Apr 2019, Dream11 was catapulted into the ‘Unicorn Club’ when Steadview Capital invested 60 Million.

Business Model

Today, the company follows the same business model (freemium), as 85% of the players are free users, and the rest 15% are paid users, with Rs 25 as the average investment into the games. It can go as low as Rs 11, and often it can cross thousands as well. The combined winning pot of all winnings is often more than Rs 1 crore, depending on the game, and trends. 15% of its 50 crore users, i.e. 7.5 crore users, pay Rs 25 per month on an average, which becomes revenues of more than Rs 187 core.

Hitting the Jackpot: IPL Sponsorship

In 2020, the Board of Control for Cricket in India (BCCI) went looking for a home-grown entity as the title sponsor for the 2020 edition of IPL to replace Chinese smartphone brand Vivo which had bagged the sponsorship rights for Rs 438 crore a year. Dream11 got that chance to hold the title sponsor banner.

It is evident that bagging the title sponsorship of IPL made Dream 11 a household name. It managed to bag the title sponsorship of IPL 2020 for Rs 222 crore. The sponsorship for IPL 2020 was up for grabs as the erstwhile title sponsor, Vivo, decided to take a break from the tournament during that season amid calls for boycotting of Chinese goods in the wake of a standoff between Indian and Chinese soldiers in Ladakh since June 2020.

The road to IPL title sponsorship, however, wasn’t all smooth for Dream11 who also had to fend off some anti-China sentiments because of its connection with Chinese technology giant Tencent. The fantasy sports platform’s top bosses, however, managed to convince the BCCI of their ‘all-Indian identity’ by suggesting that Tencent was only a minority shareholder in the company.

Dream11’s association with sports has grown over the years and it is presently partnering a total of 19 sports leagues along with 6 Indian Premier League Franchises

In June 2021, the iconic cricketer and former Indian cricket team captain Mahendra Singh Dhoni was announced as Dream11’s brand ambassador. With MS Dhoni becoming the new face of Dream11, multi-channel marketing campaigns and brand engagement activities were aimed to surge ahead and strengthen its leadership position in the online fantasy sports industry.

With Dhoni as its face, Dream11 instilled the aspiration of sporting expertise into its users by employing the same kind of thinking prowess that Dhoni is the master of.

Cashing in on the Boom

The localisation of content to reach out to players online not only helped Dream11 expand its market and enhance revenue but also to develop brand recall in a crowded market and better user experience.

Growth amid a pandemic

With the World Health Organization (WHO) prescribing video games as a healthy social pastime to combat social isolation during COVID-19, it became a win-win situation for the gamers as well as the e-sports and fantasy gaming platforms.

Under the WHO-backed campaign called #PlayApartTogether launched on March 18 this year, world’s biggest gaming industry leaders promoted the cause with a message to avoid spreading the coronavirus, while still being connected with each other remotely.

Indian Gamers

A 2019 KPMG and IFSG report outlined the key categories of e-sports gaming in India, with a focus on understanding the fantasy sports consumer. These were some of its findings:

75% of respondents played fantasy sports one to three times a week, with the majority engaging in it once a week. A significant 20 per cent reported playing more than five times a week.

85% of all respondents played fantasy games on mobile apps.

54% played for free; 46 per cent have played paid contests at least once in the last 12 months.

The playing frequency was fairly consistent across the age groups of 18-24 and 25-36 with nearly 75-80 per cent of the respondents playing one to three times a week. Nearly 50 per cent in the 37-50 age group reported playing fantasy games more than four times a week.

72% of the respondents considered ‘fun and excitement’ as the primary motivator for engaging in fantasy sports platforms.

71% of the respondents played Fantasy Cricket and 54 per cent Fantasy Football. Other sports such as kabaddi, basketball and hockey were less popular among the respondents.

When asked to recall the names of platforms that came to the respondents’ mind, 60 per cent referred to Dream11, followed by official websites of Premier League Football/English Premier League (EPL) and the IPL.

Future for Fantasy Sports

According to the ‘The Evolving Landscape of Sports Gaming in India’ report, the gaming industry is already worth around Rs. 90 billion rupees and is said to reach Rs. 118.8 billion by FY23 with a growth rate of CAGR 22.1%. The report adds that fantasy sports are different from betting and can potentially aid in slowing down illegal betting in the long run. Fairness, legality, and the safe and secure nature of transactions are aspects that draw users to play these fantasy sports platforms.

India has made exponential growth in terms of its digital infrastructure. Growing affordability of smartphones, expansion of the internet user base, and plummeting data price are resulting in such growth. Therefore, the growth of fantasy sports seems very likely to increase in the future.

Though Dream11 success was not an overnight result, it was rather a reflection of hard work and consistency in the founder’s efforts and team’s mettle in building Dreamsters, the Dream11 community. With all the internal and external factors faced by Harsh Jain and Sanghvi Bhavith Seth in turning their vision into reality, their success story is an inspiration to many pudding faces. Overcoming every hurdle with the strength to oversee through the risk and by not accepting failure with the endurance helps entrepreneurs to move forward.

The story of Dream11 sounds like an inspiring movie but it is a real story of two young minds making their dreams possible. From starting as a fantasy gaming platform to being named as the title sponsors of IPL, Dream11 has come a long way over the years and it does not seem to stop but aims bigger.

For more inspiring stories like this, read our Inspire Section!

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Can Branding in IPL be the Game Changer for Indian Start-ups

Aakash Sharma — Mon, 22 Mar 2021 00:35:05 +0000

With a value of $ 5.7 billion, the Indian Premier League (IPL) has become one of the most valuable Indian brands to be built in a short time span. The importance of branding in IPL lies in more than just the eight-week long event – in the impact the game has on the audience.

The Indian Premier League has been a success that goes beyond the commercial space. It is a new cricket brand and a new entertainment brand, which is now competing with conventional modes of entertainment.

Many experts have written about it and it is the subject of case studies taught in B schools. Along with all its local flavours, it is connected to pan-India audiences. Globally, the IPL has always established India as the centre of cricketing power.

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IPL is contributing significantly to promote the Atmanirbhar Bharat movement and allowing Indian companies to develop their brands.

Branding in IPL – A dream destination for Indian start-ups

The Indian Premier League of Cricket (IPL) ushered a huge brand consisting of games, players and famous stars. For sports fans, this is a long and unexpected adventure. According to Brand Finance’s report, the league ranks sixth among other sports leagues in the world in valuation and strategic recommendations at $5.7 billion.

The event has turned into a mega platform for businesses to showcase their mettle. Interestingly, there are four start-ups from the digital world among the top sponsors in this season’s IPL. Fantasy sports brand Dream11 is one of the main sponsors, and it purchased half-price ownership of Chinese brand Vivo’s rights for approximately Rs 222 crore in 2020. Besides, the educational technology start-up Unacademy was also the official partner of IPL 2020.

Branding in IPL is a New Niche for Unicorn Start-Ups

COIVD-19 suspended sports events and recreational activities globally, and the IPL also lost its vigour in ultra-rich sponsors and brand endorsements. Before the pandemic hit, DLF, Pepsi and Vivo were the main sponsors of IPL. While Vivo withdrew its support amid geopolitical strain between India and China, sponsorship support from other groups also receded.

Although the pandemic directly affected sports sponsorship, the championship gained momentum thanks to new start-ups occupying the place as advertisers and sponsors. Despite the economic downturn, IPL still is one of the largest sports leagues in the world. And effectively, it is a well sought-after brand marketing platform. The sponsors of the IPL 2020 passed the Rs 500 crore milestone. Backed by start-ups like Unacademy, Dream11, Byju’s and CRED, it is clear that IPL is now open to small and medium-sized businesses, along with large companies.

Start-Ups Branding in IPL are Leveraging Beyond Sponsorships

In the age of the internet, digital advertising has become more important than outdoor advertising. And companies use IPL for marketing their brand to the people. IPL is an excellent opportunity for business as it coincides with the most celebrated event in India that is cricket. In IPL 2019, advertising spending increased 100% as 246 brands advertised in the event.

The COVID-19 pandemic has increased digital consumption by enormous leaps and bounds. As a result, online platforms have opened up new avenues for advertisers to reach consumers. Experts believe that companies choose IPL marketing because most people work from home and spend a lot of time online. And most of them watch IPL matches on streaming platforms and TV.

Going in the Future, What’s in it for the Businesses?

The IPL is so big that even the coronavirus outbreak did not stop its progression. For security reasons, the 2020 season of the game was held in the United Arab Emirates. It helped the entire IPL spectrum to win a large audience. IPL events will continue to happen in the future no matter what.

To gain worldwide attention and popularity, the slogan “Vocal for Local” has bolstered national brands’ confidence, and start-ups have seen tremendous momentum in their prospects. IPL’s international appeal is seen as an opportunity for companies to stand out in the world market. It can be said that with the help of IPL, attitudes towards national brands and Indian companies are changing.

IPL is contributing significantly to promote the Atmanirbhar Bharat movement and allowing Indian companies to develop their brands. With its collectively engaging and procedural cricket games that are most popular among Indians, IPL has become an emerging market that celebrates creativity and innovation and attracts companies and digital start-ups.

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Gaming Startups of 2021: Who Will Make it Big?

Shalmoli Sarkar — Thu, 18 Feb 2021 12:35:04 +0000

The online gaming startups which were dormant to date, have experienced a huge influx of downloads owing to slower out-of-home consumption in the pandemic. Apart from OTT for entertainment, gaming is not behind in becoming a popular means of entertainment. The online gaming industry’s growth fuelled by the pandemic might continue to attract millions of dollars and is expected to surpass the previous years’ funding. The data from Tracxn says that the online gaming industry in 2020 raised $174 million compared to $97.2 million in 2019.

The growth of the online gaming startups is propelled by an expanding young population being tech-savvy, affordable smartphones, inexpensive internet plans, and higher disposable income.

The online gaming industry is expected to grow at a compound annual growth rate of 40 per cent to reach $2.8 billion by 2022 according to a report from Deloitte India. The ban of Chinese gaming app PUBG is encouraging more entrepreneurs to foray into the gaming segment. The first three months of lockdown have caused people to be in homes that have catalyzed the download of gaming apps. Against this growth potential, the marquee VCs and large corporates are eyeing the gaming industry to be a profitable one.

Which of them will be entering the big league?

Virat Kohli-backed mobile-gaming startup Mobile Premier League (MPL) is nearing a unicorn status since it recently raised $95 million in a Series D round of funding from Composite Capital and Moore Strategic Ventures. Now the latest valuation of the Mobile Premier league is standing at $945 million. MPL enjoys a fanbase of 60 million users and has over 3.5 million users from Indonesia. It offers 50 games across categories. MPL is planning to expand its esports category and will be organizing various digital tournaments in 2021. It is planning to capture the international audience in 2021.

Amid the political tensions between India and China, its most popular app PUBG bore the brunt that escalated to its ban by the Indian government. FAUG, the Indian alternative to PUBG, was released during this republic day. During its pre-launch, it had received over 1 million registrations on the Google Play store.

India’s first gaming unicorn, a fantasy sports app Dream11 with a valuation worth $1 billion, with its recent association with IPL, is aiming to expand beyond fantasy sports. In a short span of five years, its users have increased from 3 lakh to 8.2 crores. For the next two years, Dream11 is planning to expand aggressively by investing largely in grassroot sports development right from coaching to sports analytics.

The 1983 world cup hero Kapil Dev endorsed Apne11 another fantasy sports startup that is aiming to attract new users mainly from tier-II and tier -III cities by holding small-ticket e-leagues. The entry fee is as low as Rs 5 and offers league prizes of Rs 70. Apne11 is targeting to reach 500,000 users and revenues upto $1 million. Apne11 is yet to expand its prize pool to Rs 10 crore.

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The Market of Gaming Startups In India

Shalmoli Sarkar — Wed, 17 Feb 2021 12:35:04 +0000

The love for playing games in Indians begins in the evening or right after dinner, when family members gather around a carrom board or Ludo. Gradually, as families broke into nuclear the carrom boards became a distant memory and soon the games were replaced by PC games which further were replaced by mobile gaming apps, which ushered in the rise of gaming startups in India. A KPMG report projects that the Indian online gaming industry is to get 190 million gamers and become a market worth $1 billion in 2021. According to a report, released by boutique investment bank, Maple Capital Advisors titled ‘Gaming India Story’ the gaming industry will be growing at a CAGR of 22%

The online gaming apps witnessed a meteoric rise during the pandemic. With a work from home model, and no access to clubs, gyms, or other recreational activities the individuals resorted to unrest their thumbs. Though the Tencent-owned game PUBG was dominating the online gaming market, the Indian online gaming apps were no behind. Founded in 2016 by Vikash Jaiswal, Ludo King that is a replica of our favourite childhood board game Ludo, emerged as one of the most installed mobile games in April. As per app intelligence firm, Sensor Tower Ludo King app received download volumes of 48.3 million during April -June that surpassing PubG with 30.8 million new installs.

Sports fantasy gaming apps like Dream11 too became a part of the volume downloads after it sponsored the IPL 2020 after the exit of Chinese firms sponsoring the same. According to a report by KPMG and the India Federation of Sports Gaming (IFSG), there are about 20 million fantasy gamers in India right now, a gigantic jump from two million users of such games in 2016. Dream 11 allows users to earn cash by creating imaginary teams by betting on players actual match performances.

What is driving the online gaming startups in India?

As more and more Gen Z population is entering the workforce, there is a rise in disposable income to own a smartphone. According to a 2019 Bloomberg report, India is projected to have a Gen Z population of 472 million. An average gamer profile in India is of 24 years. The discovery of game apps and their download is largely driven by friends and peer groups. The youngsters’ engagement with online games is to relieve stress and increase interaction.

Gen Z and millennials are tech-savvy and are always connected with their cell phones. As per Neilson’s study more than a quarter of individuals below 24 years are highly inclined towards online gaming and spend an average time of 55 min/day.

Apart from the high penetration of affordable smartphones and internet plans now reaching every part of the country, the future seems bright for gaming startups in India since its introduction of a freemium model that leads to more downloads, creating better economics.

Online gaming startups are also transforming the traditional social Indian games to digital for the masses, which became one of the major reasons for Ludo King’s increased downloads. It transformed a traditional board game into a digital one that encouraged family and friends to play in the same ecosystem. The game was built on nostalgia to which many could connect with it.

Technologies like AI, augmented reality and virtual reality for the gaming startups to build and thrive became affordable, and also the local developer ecosystem is increasing that gives a push to the gaming startups to come up with unique games.

The Rise of Female Gamers

According to a report from Think with Google APAC-Play like a girl report, 2020, The online gaming arena is witnessing a huge influx of female gamers and is rapidly increasing than male gamers. In general, there is a perceived notion that females are shy of playing online games.

Online gaming is also now becoming a lucrative career option. Many professional online gamers are competing on a global level to win prize money from e-sports tournaments, receiving salaries from professional teams, creating content on YouTube channels to give reviews on tournaments, and training aspiring gamers as well.

The creation of content and gaming is expected to add thrust to the gaming industry, hence the future of gaming startups seems bright in India.

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