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In what is the biggest business investment to date by a foreign firm in the Indian gaming industry, Tencent Holdings, a Chinese social media and gaming conglomerate, has recently invested a massive sum of US$100 Million (â‚¹719 Crores) in Indian fantasy sports operator Dream11.
According to a report published by VCCircle, “an unnamed executive of Dream11 confirmed that the transaction with Tencent Holdings has been completed. Further details about the valuation, exact contours of the transaction and whether any existing investors, which includes venture capitalist firms Kalaari Capital and Multiples Equity would be exiting or partially selling their stake in the company has not been disclosed.”
In an interview published in June, the chief executive officer (CEO) of Dream11 Harsh Jain had talked about the growth possibilities of the company stating, “By 2020, there will be 30 crore Indian sports fans watching sports online, so we are sure that 33% of them will play fantasy sports, compared to the US where 65% of sports fans play fantasy sports.”
Discussing the future of fantasy sports in India, Jain commented that with the growth of technology and the decrease in the price of tech goods like smartphones, the future of the industry is bright, but self-regulation is a vital aspect. Jain was amongst the key individuals involved in the foundation of the Indian Federation of Sports Gaming (IFSG).
Despite Jain denying media speculation related to the discussions between Dream11 and Tencent regarding increased funding since April 2018. Media reports of the time suggested the possibility of the Chinese firm making a major investment in Dream11 at a pre-money valuation of around $400-500 Million.
Tencent is expected to make further investments of close to US$200 Million in gaming ventures in India. The Chinese company had been previously been involved in talks with two social gaming companies, Octro and MoonFrog Labs, for potential acquisition or investment opportunities.
The business transaction between Dream11 and Tencent is by far the biggest in the history of India’s gaming industry. The deal will not only provide Dream11 access to unrestricted funds but will also bring the Indian company closer to achieving its goal of getting 100 Million registered users on its platform.