Tencent Holdings is reportedly in advance talks for a major investment in online fantasy games company Dream11.
One of the top five global internet companies, Tencent has reportedly engaged in advanced stages of negotiations for a $100 million (₹ 656.63 crores) investment in Mumbai-headquartered online fantasy sports platform Dream11.
The deal could potentially change the landscape of a still-nascent industry. The term sheet term sheet for a transaction could potentially value Dream 11 a pre-money valuation of $400-$450 million in just sixth year of its operation, business daily Economic Times has reported with reference to three sources with knowledge of the development.
However, neither Tencent nor Dream11 has confirmed the news to ET.
The deal, if materialised, could be the second major signing by Tencent following its $115-million investment in music streaming service Gaana. It is not yet clear if the investment will also have a secondary component that could see Dream11’s three institutional investors exit completely or partially.
The development comes close on the heels of the Dream11 winning a favourable judgement last month from the Punjab and Haryana High Court, which has ruled that fantasy games could not be termed gambling as players require a skill set.
The ruling has also come at an opportune time for the company, clearing the decks for a substantial investment from global investors According to industry body Indian Federation of Sports Gaming (IFSG) and AC Nielsen’s report on the sector, the user base in India for online fantasy sports will cross 100 million mark by 2020.