India Gets Its First Gaming Unicorn

Dream11 is the latest entrant—and the first gaming company—to India’s growing club of unicorns, or startups valued at over $1 billion.

The valuation of Dream11 Fantasy Pvt. Ltd., the startup’s parent, soared to just under $1.5 billion after a secondary stake purchase by Hong Kong-based Steadview Capital, according to a person aware of the development. This comes about seven months after the Mumbai-based startup raised $100 million from China’s Tencent Holdings Ltd. at a valuation of $700 million. The spike in valuation comes just a month after the Board of Control for Cricket in India announced Dream11 as the official partner for the Indian Premier League in a four-year partnership beginning this season.

Three of the startup’s early backers—Kalaari Capital, private equity firm Multiples Alternate Asset Management and hedge fund Think Investments—sold a portion of their stakes in the decade-old company, Dream11 said in the statement.

“We are excited to welcome Steadview Capital onboard,” Harsh Jain, chief executive officer of Dream11, said in a statement, adding that it has joined the unicorn club without providing any other detail. “Providing great returns to our shareholders, whether investors or Dreamsters, is very important to us.”

The firm, founded by Jain and Bhavit Sheth runs a fantasy league for cricket, kabaddi, football, among other sports, allowing users to create virtual teams, and help them to organise matches based on statistical performance of players in the actual game. Dream11, which has around 60 million users on its platform currently, plans to end the year with 100 million users.

Becoming the latest unicorn is a proud moment but expect the team to push sports engagement to new heights, said Vani Kola, founder and managing director of Kalaari Capital.

Dream11’s rise was plagued with hurdles, particularly legal challenges, due to fantasy gaming’s likeness to gambling, which is largely illegal in India. Its legitimacy was challenged in the Punjab and Haryana High Court. The court, however, ruled that fantasy gaming involves skill rather than chance, the Times of India reported in April last year.

Dream11’s revenue and loss for the fiscal ended March 2018, according to filings made with the Registrar of Companies, were Rs 228.4 crore and Rs 65 crore, respectively.