Naspers, SoftBank & Tiger Global Looking to Invest Around $500 Million in Dream11

Naspers, SoftBank & Tiger Global Management may invest in Dream11
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  • Namita Ghosh August 30, 2019
  • 2 Minutes Read

India’s fantasy sports behemoth, Dream11 is rapidly expanding its horizons. After transgressing the five crore user mark in February, the company has ambitiously set its sight at reaching 10 crore users by the end of the year. The massive popularity and unparalleled growth of the platform have got the top investors lining up to take part in the ’company’s growth story.

A fortnight back we had reported that South African giant Naspers Ltd. was looking to make a secondary transaction in Dream11 to the tune of $100 Million (~₹710.62 Crores) at a rumored valuation of around $2.5 Billion (~₹17,882 Crores). While the deal was yet to go through, there are now more suitors looking to invest in Dream11.

Latest reports indicate that Naspers along with other top global technology investors including Japanese multinational conglomerate SoftBank and American hedge fund, Tiger Global Management are in talks with the Dream11 management to pick up a stake in the company. The deal in question involves a primary investment of $300 Million (~₹2,150 Crores) along with a secondary sale by the company’s existing investors worth another $200 Million (~₹1,430 Crores), bringing the total investment at an approximate $500 Million (~₹3,576 Crores) at a valuation of between $2 – $2.5 Billion!

This is about two-and-half times the $1 Billion (~₹7,153 Crores) valuation that was pegged upon the company after the last secondary transaction by American hedge fund Steadview Capital in April this year. Reports have also indicated that existing investor Tencent Holdings is also looking to increase its stake in the company.

Gathering Investor Interest

Founded in 2008 with Kalaari Capital, Think Investments and Multiples Equity as its early investors, Dream11 took its time gaining a foothold in a cricket-crazy country like India. The focus initially went primarily in building a quality product and then educating cricket fans about the concept of fantasy sports.

The next phase of funding took some time coming and finally in 2018, the company got another major capital infusion with Chinese major Tencent Holdings investing $100 million (~₹656.63 Crore) in the company.

Less than a year later (April 2019), Dream11 officially joined the elite unicorn club after American hedge fund Steadview Capital made a secondary transaction of approximately $60 Million (~₹426 Crores) in the company.

According to a TOI report that quotes two reliable sources, the company has held talks with Tokyo-based SoftBank Vision Fund, Naspers Ltd., and American Hedge fund, Tiger Global Management who are looking to make primary and secondary investments in the company worth a cumulative $500 Million (~₹3,576 Crores).

Dream11 is reportedly projecting a valuation between $2 Billion (~₹14,306 Crores) to $2.5 Billion (~₹17,882 Crores) for this deal, more than double the $1 Billion (~₹7,153 Crores) that the company was valued at in April when the secondary transaction from Steadview had come through.

“Dream11 doesn’t need money right now and was planning to raise capital only by early next year before the Indian Premier League (IPL),” one of the TOI sources reportedly stated. Sources have also hinted that one of Dream11’s existing investor Tencent Holdings has also shown interest in increasing its stake in the company.

 

Spreading Its Wings

CEO and co-founder Harsh Jain had in February predicted 2019 as a landmark year for the company. Declaring that the company’s user base had crossed the five crore milestone, Jain had set his eyes on the 10-crore mark over the year. While it seemed a tall order then, Dream11’s growth trajectory has mostly lived up to its founder’s vision.

Dream11 co-founder Harsh Jain
Dream11 co-founder Harsh Jain

The fantasy portal had got its act together well before the busy cricket season, and the capital infusion helped Dream11 capitalize on its exclusive four-year partnership with BCCI. A large part of the marketing budget was set aside for the VIVO Indian Premier League (IPL), where Dream11 was one of the associate sponsors. To further engage fans on its platform, Dream11 tied up with seven IPL franchises and cricketers for multi-channel marketing during the IPL season not to forget round the clock TVC`s featuring its brand ambassador Mahendra Singh Dhoni.

To further strengthen its dominance in the industry, Dream11 has recently acquired the official partner rights from the Board of Control for Cricket in India (BCCI) for all its international and domestic matches for up to March 31, 2023.

The insane valuation of Dream11 stems from the strong financials of the company. Dream11 has projected transactions of approximately $650 Million (~₹4,649 Crores) on its platform for the financial year ending March 2019. This figure is reported to have galloped past $2 Billion (~₹14,306 Crores) after the IPL season and the 2019 Cricket World Cup!

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