New York-based Tiger Global Management, among the leading start-up investors in India, is likely to lead a $500 million funding round in the fantasy gaming platform Dream11.
Tiger could spend as much as $200 million to buy new shares in the company as well as shares from Dream11’s early investors Kalaari Capital, Think Investment and private equity firm Multiples at a valuation of $2.5 billion, business daily Live Mint has reported quoting several anonymous people aware of the development.
Dream11 valuation following the investment will become worth more than double of its $1.1 billion worth in April 2019. The company is working with investment bank Credit Suisse for the fundraising.
“A lot of investors have been interested in Dream11. They have built a large profitable business with almost no big competitor and still a lot of avenues for growth remaining,” the publication has quoted an investor tracking the space as saying
Founded by Harsh Jain and Bhavit Sheth in 2012, Dream11 offers games such as cricket, kabaddi, and football, where users can win money from a reward pool, depending on the players they pick and the actual outcome of the game.
Dream11 official partners include the International Cricket Council (ICC), the Indian Premier League (IPL) and the National Basketball Association (NBA).
If Tiger does invest, it would mark the firm’s second late-stage bet in India in recent times. Earlier this month, Tiger had led a $200-million round in online education firm Byju’s, valuing it at $8 billion.
Dream11 had become a unicorn, valued at over a billion dollars ($1.1 billion), in April, when US-based hedge fund Steadview Capital led a $60 million round by purchasing secondary stakes from early investors. The company was valued at $700 million in September 2018, when it raised $100 million from the Chinese internet giant Tencent.
Dream11 had about 50 million subscribers in February last year, which is said to have doubled by the end of the year, the people cited above said.
Investor interest as well the company’s value have surged after the Supreme Court in an order last year said that the Dream11 format of fantasy sports is legal and one that requires considerable skill and judgement, and thus is not gambling and is protected by the Constitution as a legitimate business.
Dream11 also aims to build out its platform as a full-fledged sports platform selling merchandise.